By Devika Patel
Knoxville, Tenn., March 25 - Northern Ethanol, Inc. said in an 8-K filed Tuesday with the Securities and Exchange Commission that it has secured $90 million from a convertible bond it issued to SinoUp & Rise Ltd.
During the first two years, the seven-year bond will not pay interest but will accrue interest as principal at an unpaid coupon rate of Libor plus 10%. Thereafter, the bond will pay interest at Libor plus 15%, and the principal shall be repaid on a straight line basis until maturity.
After two years, the bond's original principal is convertible into common shares at $3.00 per share.
Proceeds will be used to construct an ethanol plant in Ontario.
Located in Toronto, Northern Ethanol produces fuel ethanol.
| Issuer: | Northern Ethanol, Inc.
|
| Issue: | Convertible bond
|
| Amount: | $90 million
|
| Maturity: | Seven years
|
| Coupon: | Libor plus 10% for the first two years, Libor plus 15% thereafter
|
| Price: | Par
|
| Yield: | Libor plus 10% for the first two years, Libor plus 15% thereafter
|
| Conversion price: | $3.00
|
| Warrants: | No
|
| Investor: | SinoUp & Rise Ltd.
|
| Announcement date: | March 25
|
| Stock symbol: | OTCBB: NOET
|
| Stock price: | $1.50 at close March 24
|
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