Evergreen to issue shares, cash for $42.7 million 8% convertibles

By Jennifer Chiou

New York, Oct. 1 - Evergreen Energy, Inc. entered into agreements to issue 33,410,048 shares and pay $3.5 million in cash in exchange for $42.7 million of its 8% convertible secured notes due 2012, according to an 8-K filing with the Securities and Exchange Commission.

Also on Tuesday, the company obtained the needed consents to amend the note indenture to eliminate substantially all of the restrictive covenants, to release the security interests in the collateral securing the notes and to make other conforming changes.

In an internet blog entry, Kevin R. Collins, the company's president and chief executive officer, said: "[The conversions are] rooted in a strategy to deleverage Evergreen's balance sheet and improve our financial flexibility as we pursue definitive agreements to construct K-Fuel production facilities - the most critical value-creation objective of our company."

Collins also referred to the company's progression on plant development activities, noting that it began to improve flexibility to finance these activities in the spring.

"While we would obviously prefer to reduce leverage in a manner that minimizes dilution risk for our shareholders, we also recognized that our convertible debt is secured by certain key assets that could give us added financial flexibility for business development purposes if they were released from that obligation," Collins added.

U.S. Bank NA is the trustee.

Evergreen Energy, based in Denver, refines coal into a cleaner solid fuel.

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