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US: Drinks Americas sells stake to Worldwide Beverage Imports

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Drinks Americas has agreed in principle to sell a 49% stake in its business to California-based Worldwide Beverage Imports.

Drinks Americas announced today (13 June) that it has signed a letter of intent to sell 125m common shares to Worldwide Beverage Imports in exchange for distribution rights to Worldwide Beverage Imports' brands. If the transaction closes as planned, the California-based group will own 49% of Drinks Americas by 15 July at the latest.

The deal helps Drinks Americas to secure access to extra finance. The Olifant vodka and Rheingold beer brewer reported net losses of US$5.6m in its last fiscal year, to the end of April 2010.

In addition to the shares of common stock for the distribution rights to each of the new products, Worldwide Beverage will make a capital contribution to Drinks Americas of no less than US$1.5m in cash.

The final terms and conditions of the transaction are being negotiated, both firms said.

Worldwide currently markets and sells beers produced by Mexico's third largest brewer, Cerveceria Mexicana, as well as for Tequila group Fabrica de Tequilas Finos.

"The products and the resources in the combined companies will provide a significant platform and will position our Company for growth and expansion," said Drinks Americas' CEO, J Patrick Kenny. "This transaction provides Drinks Americas with production and inventory resources for both our existing and newly added products and strengthens the company exponentially," he said.

In order to help Drinks Americas to completed the transaction, the group said that an unnamed board member of Drinks Americas has agreed to loan the company $250,000, bearing interest at 8% annually and payable monthly in arrears from 1 July.


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