Williams Industrial Services Group Announces Plan for $7 million Rights Offering to Stockholders with Backstop Commitment
Williams Industrial Services Group Inc. (OTCQX: WLMS) (“Williams” or the “Company”), a construction and maintenance services company, announced today that it has filed a registration statement on Form S-1 with the Securities and Exchange Commission (the “SEC”) for a rights offering (the “Rights Offering”) to existing holders of its common stock. The Rights Offering is supported by a commitment (the “Backstop Agreement”) with Wynnefield Capital, Inc. (referred to, along with its affiliates as “Wynnefield”) to purchase all unsubscribed shares of common stock in the Rights Offering. The Company expects to receive aggregate gross proceeds of $7.0 million before fees and expenses from the Rights Offering, supported by the Backstop Agreement, if necessary.
The purpose of the Rights Offering is to raise capital in a cost-effective manner that allows all stockholders to participate. The proceeds from the Rights Offering will be used for working capital to fund the Company’s strategic growth initiatives and for general corporate purposes.
Under the Rights Offering, holders of Williams’ common stock will receive one nontransferable right to purchase a specified amount of new common stock for each share of common stock owned. Stockholders who fully exercise their rights will also be entitled to an over-subscription privilege to purchase additional shares of common stock that may remain unsubscribed as a result of any rights that are unexercised in the Rights Offering. The subscription price for the purchase of common shares pursuant to the Rights Offering is currently projected to be based on a range of discount between 5% and 25% to the 25-trading-day volume weighted average price for the period immediately preceding the initiation of the Rights Offering.
The Backstop Agreement is provided by Wynnefield, the Company’s largest shareholder, which holds approximately 19.2% of shares outstanding. Nelson Obus, President of Wynnefield Capital, Inc. and the managing member of Wynnefield Capital Management, LLC, serves on the Company’s Board of Directors. Under the Backstop Agreement, Wynnefield agrees to purchase any and all unsubscribed shares of common stock in the Rights Offering, subject to the terms, conditions and limitations of the Backstop Agreement, at the subscription price established for the Rights Offering.