Castle Brands has said that it has completed a cash infusion of US$15m, designed to improve the drinks group's stability by cutting debt.

The deal will see Castle issue around 86m shares of common stock, it said yesterday (21 October).

The drinks firm, which owns brands including Boru vodka and Limoncello, annonced last week that it had completed a cash infusion deal with several investors, led by Dr Phillip Frost.

Castle chairman Mark Andrews said: "We are very glad to have successfully completed this transaction, particularly in such a difficult financial environment. It brings a critically important equity infusion and also eliminates virtually all of our debt."
He added: "Together, these developments put our company on much firmer footing, which will enable us to pursue our original vision of building our own premium brands, supporting our existing agency brands, pursuing new agency relationships and making brand acquisitions."

Under the deal, Castle will issue 1.2m new shares Series A Convertible Preferred Stock for a price per share of $12.50. Shareholders in subsidiary firm Castle Brands Corp will also transfer their shares to the Series A stock. This will then be converted into common stock, worth an expected $0.35 per share.

Castle reduced its first quarter loss by 16% in its first fiscal quarter ended 30 June, it said in August. Full-year losses for its 2007/08 financial year deepened to $27.6m, from $16.5m a year earlier, however.