Paris-based IoT chipmaker Sequans Communications has secured $50M (approx €42M) in capital from investment management firm Lynrock Lake, an existing shareholder of the company.
The financing consists of $10M (approx €8.4M) of American Depositary Shares (priced at $5.50 per ADS) and $40M (approx €34M) principal amount of convertible debt (convertible into ADS at a conversion price of $7.66).
The convertible debt matures in three years and pays interest annually at an interest rate of 5.0625 per cent for cash payments or 6 per cent for Payment in Kind (PIK) accruals. The financing is scheduled to close on April 9, 2021.
The company will use the proceeds to repay $11.7M (approx €9.8M) in convertible debt and interest that is due on April 14, 2021. The remaining proceeds will be used for general corporate purposes, claims the company.
“A stronger balance sheet improves Sequans’ standing as we accelerate our Massive IoT business and engage with potential strategic partners interested in our 5G technology. Increased cash on our balance sheet also provides the Company with additional working capital to manage the ongoing component and supply chain dynamics,” says Georges Karam, Sequans CEO. “We are delighted to secure this financing with Lynrock Lake, an existing shareholder of Sequans. Lynrock Lake’s long-term, value-oriented investment strategy and experience in the semiconductor industry aligns with our goals to maximise opportunities in 5G/4G Massive IoT and Broadband IoT and to improve long-term shareholder value.”
Sequans retains an option to call the convertible debt under certain circumstances after 12 months, subject to a 9.9 per cent ownership limit for Lynrock Lake. Lynrock Lake has not requested a board seat.
Develops and delivers chips
Founded in 2003 by Georges Karam and a team of broadband experts from Alcatel and Pacific Broadband, Sequans develops and delivers 5G/4G chips and modules that are fully optimised for non-smartphone devices.
The company’s product portfolio is composed of chips, or integrated circuits (IC), of baseband processors and radio frequency (RF) transceivers, as well as machine-to-machine (M2M) modules.
On the software front, the portfolio contains an advanced modem and signal processing code, as well as protocol stack and higher-layer applications.
Notably, the company has been developing 5G since 2013 and has added R&D facilities in Israel, France, and Finland, dedicated to completing development and bringing 5G products to market.
Q1 2021 results incoming
The company has announced the release of its financial results for the first quarter of 2021 on Tuesday, April 27, 2021, during pre-market hours
Sequans is based in Paris, France with additional offices in the United States, United Kingdom, Israel, Hong Kong, Singapore, Taiwan, South Korea, and China.