AST SpaceMobile Inc ( ASTS ) shares are sliding Wednesday morning after the company announced a registered direct offering.

What Happened: AST SpaceMobile ( ASTS ) announced a series of transactions that will result in the company issuing approximately 1.04 million incremental shares to the underlying shares of its 2032 convertible notes.

The company priced a cash repurchase of $225 million of its 4.25% convertible notes due 2032 pursuant to privately negotiated repurchase transactions with certain holders, and also announced a registered direct offering of 9.45 million shares to holders of the 2032 convertible notes that are participating in the repurchase.

The transactions are expected to remove $225 million of debt from the company’s balance sheet and approximately $63.8 million of remaining interest.

AST SpaceMobile ( ASTS ) said it has agreed to sell the 9.45 million shares in the direct offering at $53.22 per share. The offering and the repurchase are expected to take place on or about July 1.

“We are excited to retire approximately half of our 2032 convertible notes and the underlying shares at a price attractive to our shareholders in a series of innovative transactions. These transactions allow us to substantially reduce our outstanding debt and cash interest obligations,” said Scott Wisniewski, president of AST SpaceMobile ( ASTS ).

AST SpaceMobile ( ASTS ) had a total of $874.5 million in cash, cash equivalents and restricted cash as of March 31, as well as $462.2 million of long-term debt.

Scotiabank analyst Andres Coello downgraded AST SpaceMobile ( ASTS ) from Sector Outperform to Sector Perform on Monday with a price target of $45.40. The downgrade comes after the stock more than doubled over the past month.

ASTS Price Action: AST SpaceMobile ( ASTS ) shares were down 2.11% at $52.09 at the time of publication Wednesday, according to Benzinga Pro.

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