Drinks Americas has cut its net debt by 15% as part of a strategy to improve the company's finances.

Drinks Americas, which owns Olifant vodka and Kid Rock-endorsed Badass beer, said today (3 November) that it has shaved US$1m off its net debt.

The money was owed by the firm to its CEO, J. Patrick Kenny, and other board members. But, as an alternative means of payment, the company will issue the lenders more than 1.7m shares of common stock and warrants to acquire more than 9.8m shares of common stock.

The shares and exercise price of the warrants will be valued at $0.15 each. The conversion price of the warrants is more than three times the current price of Drinks Americas shares.

Kenny said: "Our intention is that our willingness to convert these obligations at this premium, further contingent on profitability, sends a strong signal to our shareholders.

"Our credit facility is back in place supporting production and shipping of goods. We will continue to take steps like this to move the company to a stronger financial position."

Under the terms of the deal, half of the warrants can be exercised at anytime in the next ten years and the other 50% will only be exercisable once the company has achieved positive EBITDA (operating profits) for two successive quarters.

If this profitability standard is not met, 50% of the warrants will be forfeited.

Drinks Americas said last month that it expects net spirits sales in its second fiscal quarter to be significantly higher than last year.