Cereplast enters Securities Purchase Agreement to raise $12.5m

June 2, 2011 |

In California, Cereplast has entered into a Securities Purchase Agreement with select institutional investors. Under the terms of the purchase agreement, the company will raise $12.5 million in an offering of 7% senior subordinated convertible notes due June 1, 2016.  Proceeds from the financing will be used for working capital to meet the increasing demand for the company’s bioplastic resins, driven by recently signed distribution agreements and increased legislation banning the use of traditional plastics. Based on current demand, the company expects rapid expansion in Europe and other emerging markets. Under the terms of the notes, Cereplast will pay interest semi-annually and the notes will mature on June 1, 2016, unless earlier repurchased or converted into shares of common stock, equivalent to a conversion price of approximately $5.80 per share of common stock, subject to adjustment.  Lazard Capital Markets LLC served as lead placement agent for the offering with Roth Capital Partners, LLC and Ardour Capital Investments, LLC serving as co-placement agents.

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