US: Drinks Americas raises funds in debt placement

By | 25 June 2009

Drinks Americas Holdings has closed a private placement of debt to one investor that will result in the immediate funding of US$375,000 in cash for the company with deferred advances aggregating $2,625,000.

The debt was structured as a $4m non-interest bearing debenture with a 25% original issue discount, which, if it reaches maturity, equates to an effective annual interest rate of approximately 8% per annum.

In addition, the investor, who was not named in the statement, is to receive warrants to purchase 2.5m shares of the company's common stock at an exercise price of $0.35 per share.

J. Patrick Kenny, the company's CEO, said: "We believe that this financing is very favourable for the company especially in this challenging economic environment. The transaction will provide the company with an immediate and near term cash infusion which will enhance our cash flow and enable us to continue to grow and expand our brands.

"Prominent in this growth is our imminent beer launch with Kid Rock, our growing Leyrat Cognac business, the continued growth of Trump Vodka and our rapidly growing Olfiant Vodka business, all of which this financing will help facilitate."

Sectors: Spirits

Companies: Drinks Americas

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