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Rackspace Technology has successfully raised $507 million in its earliest round of buying back shares to go toward paying off its outstanding bond debt, the locally headquartered company announced Wednesday in a press release.
Earlier this month, the cloud services company began making moves to reduce its obligations on high-interest debts by seeking to buy back up to $600 million of the $1.12 billion outstanding bond debt garnered from senior debt, which takes priority for repayment. The $507 million raised by Rackspace makes up about 45 percent of its outstanding notes, according to the release.
According to the company’s amended S-1 form filed with the SEC in July, as of March 31, Rackspace had $3.9 billion in outstanding debt, $3 billion of which it attributes to being acquired by Apollo Global Management in 2016.
Rackspace stated in the S-1 form it planned to reuse a portion of its IPO to pay back $600 million of its senior debt and related fees.
Rackspace set an early buy-back deadline for midnight on Aug. 25, offering to buy shares from holders at $1,027.50, plus an early-sell payment of $30, for every $1,000 of stock. The offer’s regular deadline is set for Sept. 9.
The company also announced Wednesday it is amending the regular offer from $1,027.50 to $1,057.50 for every $1,000 of stock, making it equivalent to the early-sell price.
After going public on the Nasdaq earlier this month, Rackspace Technology raised just over $700 million from its initial public offering, but its stock plunged almost 20 percent before opening.
However, Rackspace’s shares jumped as high as 19 percent last week after rumors began circulating that Amazon may be in talks for a potential investment in the Windcrest-based company. Its shares were up about 13 percent to $18.62 Thursday afternoon.