PRESS RELEASE - Hampton Roads Bankshares Inc receives a $50 million investment
Hampton Roads Bankshares, Inc. (Nasdaq:HMPR) (the "Company"), the holding company for The Bank of Hampton Roads ("BHR") and Shore Bank, today announced that it has closed a $50 million private placement of common stock (the "Private Placement"). The Company issued an aggregate 71,428,572 common shares at a price of $0.70 per share to the following entities or their affiliates or managed funds: Anchorage Capital Group, L.L.C., CapGen Capital Group VI LP and The Carlyle Group (together, the "Investors") pursuant to the terms of a standby purchase agreement between the Investors and the Company.
The Company plans to raise an additional approximately $30 million to $45 million in capital by issuing from 42,836,460 to 64,285,714 common shares in a public rights offering (the "Rights Offering") that it expects to undertake during the third quarter of 2012. In the Rights Offering, the Company will grant each of its shareholders other than the Investors non-transferable rights to purchase up to, but no more than, a pro rata share of the maximum $95 million in capital to be raised in the Private Placement and the Rights Offering. The rights will be distributed to shareholders of record as of May 31, 2012 and may be exercised at $0.70 per share, the same price per share paid by the Investors in the Private Placement. The Rights Offering will commence upon the registration statement for the Rights Offering shares being declared effective by the Securities and Exchange Commission (the "SEC").
The Investors have agreed not to participate in the Rights Offering and have agreed to serve as standby purchasers of all or a portion of the shares offered but not purchased in the Rights Offering (the "Standby Purchase"). The number of shares the Investors purchase as standby purchasers and the ultimate size of the combined capital raise will depend on the level of shareholder participation in the Rights Offering.
In addition, the Investors have terminated warrants they hold to purchase 1,836,302 shares of the Company's common stock at a current exercise price, subject to adjustment, of $10.00 per share.
The Company expects to use the proceeds from the Private Placement and Rights Offering for general corporate purposes, which will include, but not be limited to, making capital contributions to its banking subsidiaries.
