NEW
YORK, Nov. 20, 2024 /CNW/ - Galaxy Digital
Holdings Ltd. (TSX: GLXY) ("GDH Ltd." or the "Company") is
pleased to announce that Galaxy Digital Holdings LP (the "Issuer,"
and together with GDH Ltd., "Galaxy") has priced its offering of
$350 million (upsized from previously
announced $300 million) aggregate
principal amount of 2.50% exchangeable senior notes due 2029 (the
"Notes"). The Issuer intends to use the net proceeds from the
offering to support the build-out of high-performance computing
infrastructure at its Helios data center in West Texas and for general corporate purposes,
including potential repurchases of its existing indebtedness.
The Issuer granted to the initial purchasers of the Notes an
option to purchase up to an additional $52.5
million aggregate principal amount of the Notes during a
13-day period beginning on, and including, the first day on which
the Notes are issued. The offering is expected to close on
November 25, 2024, subject to
customary closing conditions, including the approval of the Toronto
Stock Exchange ("TSX").
As previously announced, the Company's board of directors has
approved a proposed corporate reorganization (the "Reorganization")
whereby Galaxy intends to consummate a series of related
transactions in connection with its re-domiciliation to
the United States, as a result of
which the ordinary shares of GDH Ltd. ("ordinary shares")
outstanding immediately prior to such transactions will
automatically convert into shares of Class A common stock (the
"Class A shares," and, together with ordinary shares, the "Common
Stock") of Galaxy Digital Inc., a Delaware holding company ("GDI"). Prior to
September 1, 2029, the Notes will be
exchangeable only upon satisfaction of certain conditions and only
during certain periods, and thereafter, the Notes will be
exchangeable at any time prior to the close of business on the
second scheduled trading day immediately preceding the maturity
date. The Notes will be exchangeable on the terms set forth in the
indenture for the Notes into cash, ordinary shares if the exchange
occurs prior to the Reorganization or Class A shares if the
exchange occurs after the Reorganization, or a combination of cash
and ordinary shares or Class A shares, as applicable, in each case,
at the Issuer's election. The exchange rate will initially be
10,497.5856 shares of Common Stock per $250,000 principal amount of Notes, equivalent to
an initial exchange price of approximately USD$23.81 (CAD$33.30 equivalent based on the November 20, 2024 exchange rate) per share of
Common Stock. The initial exchange price of the Notes represents a
premium of approximately 37.50% to the CAD$24.22 closing price of the ordinary shares on
the TSX on November 20, 2024. The
exchange rate will be subject to adjustment in some events. In
addition, following certain corporate events that occur prior to
the maturity date or the Issuer's delivery of a notice of
redemption, the Issuer will increase, in certain circumstances, the
exchange rate for a holder who elects to exchange its Notes in
connection with such a corporate event or a notice of redemption,
as the case may be.
The Notes will be general unsecured obligations of the Issuer,
will accrue interest at a rate of 2.50% per year, payable
semi-annually in arrears on June 1
and December 1 of each year,
beginning on June 1, 2025. The Notes
will mature on December 1, 2029,
unless earlier repurchased, redeemed or exchanged. The Notes will
not be redeemable by the Issuer at any time before December 6, 2027, except in certain circumstances
set forth in the indenture. The Notes will be redeemable, in whole
or in part, for cash at the Issuer's election at any time, and from
time to time, on or after December 6,
2027 and prior to the 41st scheduled trading immediately
before the maturity date, but only if the last reported sale price
per Common Stock exceeds 130% of the exchange price for a specified
period of time. The redemption price for any Note called for
redemption will be the principal amount of such Note plus accrued
and unpaid interest on such Note to, but not including, the
redemption date.
If a "fundamental change" (as defined in the indenture) occurs,
then, subject to certain conditions, noteholders may require
the Issuer to repurchase their Notes for cash. The repurchase price
will be equal to the principal amount of the Notes to be
repurchased, plus accrued and unpaid interest, if any, to, but not
including, the applicable repurchase date.
The Notes and any Common Stock issuable or deliverable upon
exchange of the Notes have not been and will not be registered
under the U.S. Securities Act of 1933, as amended (the "Securities
Act"), or any applicable state or foreign securities laws, or
qualified by a prospectus in Canada. The Notes and any Common Stock
issuable or deliverable upon exchange of the Notes may not be
offered or sold in the United
States absent registration under the Securities Act or an
applicable exemption from registration under the Securities Act.
Following the Reorganization and subject to certain conditions,
holders of the Notes are expected to have the benefit under a
registration rights agreement to require GDI to register the resale
of any Class A shares issuable upon exchange of the Notes on a
shelf registration statement to be filed with the U.S. Securities
and Exchange Commission. The Notes will only be offered and sold to
persons who are both reasonably believed to be "qualified
institutional buyers" (as defined in Rule 144A under the Securities
Act) and are "qualified purchasers" for purposes of Section 3(c)(7)
of the U.S. Investment Company Act of 1940, as amended, and the
rules thereunder. Offers and sales in Canada will be made only
pursuant to exemptions from the prospectus requirements of
applicable Canadian securities laws.
This news release is neither an offer to sell nor the
solicitation of an offer to buy the Notes or any other securities
and shall not constitute an offer to sell or solicitation of an
offer to buy, or a sale of, the Notes or any other securities in
any jurisdiction in which such offer, solicitation or sale is
unlawful.
Cautionary Statement Concerning Forward-Looking
Statements
The information in this press release may contain forward
looking information or forward looking statements, including under
Canadian securities laws (collectively, "forward-looking
statements"). Our forward-looking statements include, but are not
limited to, statements regarding the closing of this offering and
the use of proceeds therefrom, our or our management team's
expectations, hopes, beliefs, intentions or strategies regarding
the future. Statements that are not historical facts, including
statements about Galaxy's business pipelines for banking,
expectations for increased load capacity at the Helios site,
mining goals and our ability to capture adjacent opportunities,
including in high-performance computing and the Helios transaction,
focus on self-custody and validator solutions and our commitment to
the future of decentralized networks and the pending
Reorganization, and the parties, perspectives and expectations, are
forward-looking statements. In addition, any statements that refer
to estimates, projections, forecasts or other characterizations of
future events or circumstances, including any underlying
assumptions, are forward-looking statements. The words
"anticipate," "believe," "continue," "could," "estimate," "expect,"
"forecast," "intend," "may," "might," "plan," "possible,"
"potential," "predict," "project," "should," "would" and similar
expressions may identify forward-looking statements, but the
absence of these words does not mean that a statement is not
forward-looking. The forward-looking statements contained in this
document are based on our current expectations and beliefs
concerning future developments and their potential effects on us
taking into account information currently available to us. There
can be no assurance that future developments affecting us will be
those that we have anticipated. These forward-looking statements
involve a number of risks, uncertainties (some of which are beyond
our control) or other assumptions that may cause actual results or
performance to be materially different from those expressed or
implied by these forward-looking statements. These risks include,
but are not limited to: (1) the inability to complete the proposed
Reorganization, due to the failure to obtain shareholder and stock
exchange approvals, or otherwise; (2) changes to the proposed
structure of the Reorganization that may be required or appropriate
as a result of applicable laws or regulations or as a condition to
obtaining shareholder or stock exchange approval of the
Reorganization; (3) the ability to meet and maintain listing
standards following the consummation of the Reorganization; (4) the
risk that the Reorganization disrupt current plans and operations;
(5) costs related to the Reorganization, operations and strategy;
(6) changes in applicable laws or regulations; (7) the possibility
that Galaxy may be adversely affected by other economic, business,
and/or competitive factors; (8) changes or events that impact the
cryptocurrency industry, including potential
regulation, that are out of our control; (9) the risk that our
business will not grow in line with our expectations or continue on
its current trajectory; (10) the possibility that our addressable
market is smaller than we have anticipated and/or that we may not
gain share of it; and (11) the possibility that there is a
disruption in mining impacting our ability to achieve expected
results or change in power dynamics impacting our results or our
ability to increase load capacity; (12) any delay or failure to
consummate the business mandates or achieve its pipeline goals in
banking and Gk8; (13) liquidity or economic conditions impacting
our business; (14) regulatory concerns, technological challenges,
cyber incidents or exploits on decentralized networks;
(15) the failure to enter into definitive agreements or otherwise
complete the anticipated transactions with respect to the
non-binding term sheet for Helios; (16) TSX approval of the
offering and (17) those other risks contained in the Annual
Information Forms for GDH Ltd. and the Issuer for the year ended
December 31, 2023 available on their
respective profiles at www.sedarplus.ca and their respective
Management's Discussion and Analysis, filed on November 7, 2024. Factors that could cause actual
results to differ materially from those described in such
forward-looking statements include, but are not limited to, a
decline in the digital asset market or general economic conditions;
the possibility that our addressable market is smaller than we have
anticipated and/or that we may not gain share of the stated
addressable market; the failure or delay in the adoption of digital
assets and the blockchain ecosystem; a delay or failure in
developing infrastructure for our business or our businesses
achieving our banking and Gk8 mandates; delays or other challenges
in the mining business related to hosting, power or our mining
infrastructure, or our ability to capture adjacent opportunities;
any challenges faced with respect to decentralized
networks, considerations with respect to liquidity and capital
planning and changes in applicable law or regulation and adverse
regulatory developments. Should one or more of these risks or
uncertainties materialize, they could cause our actual results to
differ materially from the forward-looking statements. The
forward-looking statements included in this press release are made
only as of the date hereof. We are not undertaking any obligation
to update or revise any forward-looking statements whether as a
result of new information, future events or otherwise. You should
not take any statement regarding past trends or activities as a
representation that the trends or activities will continue in the
future. Accordingly, you should not put undue reliance on these
statements.
Other Disclaimers
The TSX has neither approved nor disapproved the contents of
this press release.
SOURCE Galaxy Digital Holdings Ltd.