| Item 7.01 | Regulation FD Disclosure. |
On March 15, 2021, Par Pacific Holdings, Inc. (the “Company”) issued a news release announcing a public offering of its common stock. A copy of the news release is filed as Exhibit 99.1 to this Current Report on Form 8-K, and is incorporated herein by reference.
The information in this Item 7.01 (including the exhibits) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act.
In connection with the public offering, the Company is providing the following updates.
Sale-Leaseback Transaction
As previously disclosed, Par Hawaii, LLC and Par Property LLC (collectively, the “Sellers”), and MDC Coast HI 1, LLC, (the “Buyer”) consummated a sale-leaseback transaction (the “Sale-Leaseback Transaction”), pursuant to which the Sellers agreed to sell to the Buyer a total of 22 retail convenience store/fuel station properties located in Hawaii (the “Sale-Leaseback Properties”) for an aggregate cash purchase price of $116.1 million.
On February 23, 2021, the Sellers and the Buyer closed the Sale-Leaseback Transaction with respect to 21 of the 22 contemplated Sale-Leaseback Properties for an aggregate cash purchase price of approximately $109.4 million. On March 12, 2021, the Sellers and the Buyer closed the Sale-Lease Back Transaction with respect to the remaining property for the remaining aggregate cash purchase price of approximately $6.7 million. The Company used the net cash proceeds to pay off the Mid Pac Term Loan, in addition to other term loans previously disclosed. The Company expects to use the remainder of the net cash proceeds for general corporate purposes.
Risk Factor Update
The Company is also supplementing the risk factors set out under “Item 1A. Risk Factors” in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “2020 Form 10-K”) with an additional risk factor set out below. The risk factor below should be read in conjunction with the risk factors set out in the 2020 Form 10-K.
Conversion of the Company’s 5.00% Convertible Senior Notes due 2021 will dilute the ownership interest of existing stockholders, or may otherwise depress the price of the Company’s common stock.
The Company’s approximately $48.7 million outstanding principal amount of 5.00% Convertible Senior Notes due 2021 (the “Convertible Notes”) will mature on June 15, 2021. Pursuant to the indenture governing the Convertible Notes, on March 10, 2021 the Company gave notice of its election to settle all conversions of the Convertible Notes by the delivery of shares of the Company’s common stock for all such conversions occurring on or after March 15, 2021.
The conversion of some or all of the Convertible Notes will dilute the ownership interests of existing stockholders to the extent the Company delivers shares of its common stock upon any such conversion. Any sales in the public market of the Company’s common stock issuable upon such conversion, or the anticipated conversion of the Convertible Notes into shares of the Company’s common stock, could adversely affect prevailing market prices of its common stock. In addition, the existence of the Convertible Notes may encourage short selling by market participants because the conversion of the Convertible Notes could be used to satisfy short positions, which could depress the price of the Company’s common stock.
