Shares of Plug Power Inc. (PLUG) plummeted 20.56% in after-hours trading on Tuesday, following the company's announcement of a $375 million private offering of convertible senior notes due 2033. This significant move comes as the hydrogen fuel cell maker seeks to raise capital to refinance existing debt and bolster its financial position.

According to the company's statement, Plug Power intends to use approximately $243 million of the net proceeds to fully repay the outstanding principal amount of its 15% secured debentures, along with the related termination fee. The remaining funds will be allocated to repurchase all or a portion of its existing 7% convertible bonds due 2026 and for general corporate purposes. Additionally, the company plans to grant the initial purchaser a 13-day option to buy up to an additional $56.25 million aggregate principal amount of the notes.

The sharp decline in Plug Power's stock price reflects investors' concerns about potential dilution of existing shareholders and the company's ongoing need for capital. This offering comes at a time when Plug Power has been working to streamline operations and enhance cash efficiency through its recently announced Project Quantum Leap initiative. The market's reaction suggests that investors are wary of the company's financial strategy and its implications for long-term value creation in the competitive hydrogen solutions sector.