PureCycle Technologies launched a dual $395-million underwritten offering of convertible senior notes and common stock to restructure debt.
- The capital raise splits into $250 million of convertible senior notes maturing in 2032 alongside $145 million in newly issued common stock.
- Net proceeds from the joint offering are primarily designated to repurchase outstanding 7.25% green convertible notes due in 2030.
- Morgan Stanley is managing the dual transaction.
PureCycle Technologies Inc. (PCT) shares tumbled 14% in after-hours trading Wednesday after the plastics recycling enterprise revealed plans for a dual debt and equity issuance totaling $395 million.
The underwritten public campaign consists of $250 million in convertible senior notes maturing in 2032 and an additional $145 million in common stock. Underwriters have also been granted a standard 30-day window to acquire up to an extra $37.5 million in notes and $18.75 million in common stock to fulfill overallotments.
PureCycle Technologies, which specializes in upgrading polypropylene plastic waste into high-quality recycled resin, intends to deploy the net proceeds primarily to buy back portions of its outstanding 7.25% green convertible notes due in 2030 via private negotiations. Remaining balances from the dual offering are slated to support further debt management, general operations, and working capital needs.
The incoming senior notes represent general unsecured financial duties of PureCycle, with interest payments distributed semiannually. Final pricing structures, including interest rates and conversion formulas, are to be locked in at a future date. Morgan Stanley is acting as the exclusive book-running manager for the joint offerings.
PCT Stock: Analyst View
Three out of six analysts rate the stock ‘hold’ and three rate ‘buy’ with an average 12-month price target of $11.83 per share, representing a 19.7% upside.
Analysts at Northland lowered the firm's price target on PureCycle Technologies to $14 from $16 in March this year and kept an ‘Outperform’ rating on the shares. Management "seems optimistic" that the commercial ramp will be tangible in 2026, but investors "need proof," the analyst added.
PCT Stock: Retail View
Retail sentiment on Stocktwits was ‘bearish’ with ‘high’ message volumes. Retail chatter fell 30% over the past week, but rose 133% over the last month.
However, one user highlighted the stock will be back up soon and the recent selling was due to margin calls.
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PCT stock has gained 11.3% year to date.
