By Sheri Kasprzak
New York, July 24 - Earth Biofuels, Inc. received agreements from institutional and other investors for a $52.5 million private placement of senior convertible notes.
The 8% notes due 2011 are convertible into common shares at $2.90 each.
The coupon on the notes may decline to 6% in 2007 if the company achieves certain financial milestones.
The investors will also receive warrants for 9,051,725 shares, exercisable through July 2011 at $2.90 each.
Cowen & Co. was the placement agent.
Proceeds from the deal will be used to repay its 8% senior convertible notes previously issued. The rest will be used to acquire interests in biodiesel and ethanol production facilities.
Earth Biofuels, based in Dallas, develops alternative fuels, including biodiesel.
| Issuer: | Earth Biofuels, Inc.
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| Issue: | Senior convertible notes
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| Amount: | $52.5 million
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| Maturity: | 2011
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| Coupon: | 8%
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| Price: | Par
|
| Yield: | 8%
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| Conversion price: | $2.90
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| Warrants: | For 9,051,725 shares
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| Warrant expiration: | July 2011
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| Warrant strike price: | $2.90
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| Placement agent: | Cowen & Co.
|
| Announcement date: | July 24
|
| Stock symbol: | OTCBB: EBOF
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| Stock price: | $3.19 at close July 24
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