Electronic Cigarettes cuts interest rate on notes, convertibles to 4%

Investors also agree to defer all principal payments until June 2020

By Devika Patel

Knoxville, Tenn., July 8 – Electronic Cigarettes International Group, Ltd. said it amended the terms of senior secured and convertible notes.

Investors agreed to reduce the interest rates on the debt to 4% from 12% and 8%, respectively. In addition, all principal payments will be postponed for four years until June 30, 2020.

The amount of senior secured debt was increased by $4 million. The company said the $4 million cash infusion was obtained to capitalize on potential growth opportunities in the category globally.

“The recapitalization represents significant progress for the company by alleviating interest payment pressure in the immediate term and infusing an additional $4 million of capital into the business, significantly increasing the runway to drive profitable growth in the future,” chief executive officer Dan O'Neill said in a press release. “Debt holders with senior secured positions relinquished their senior positions to ensure all others would participate in the recapitalization. We are thankful to our stakeholders who have demonstrated continued belief in ECIG and support of the strategic plan and our profitable growth potential.”

The Spring Lake, Mich., company markets and sells electronic cigarettes.

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