$12,500,000 offering of 7% senior subordinated convertible
notes due June 1, 2016.
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Cereplast Announces $12,500,000 Private Placement
Transaction Provides Company with Working Capital to Support Growing Worldwide
Demand for Bioplastics
EL SEGUNDO, Calif., May 19, 2011 (BUSINESS WIRE) -- Cereplast, Inc. (CERP), a
leading manufacturer of proprietary bio-based, compostable and sustainable
plastics 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.
"We are at an inflection point of a growing need for bioplastics worldwide," said
Frederic Scheer, Chairman and CEO of Cereplast, Inc. "Demand is being driven by
legislation for bio-based alternatives to petroleum-based plastics, as well as
the rising price of commodities. Proceeds from this transaction will provide us
with the capital to deliver on our growth expectations as we are now well
positioned to capture the rising demand that exists in the marketplace. Not only
do we expect continued growth to come from the European marketplace, but new
legislation in India, Brazil and other countries have introduced a tremendous
opportunity for Cereplast bioplastics in those regions and beyond."
Terms of Senior Subordinated Convertible Notes
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 as
described below. The notes are convertible into shares of Cereplast common stock
at a conversion rate of 172.4138 shares of common stock per $1,000 principal
amount of convertible notes, equivalent to a conversion price of approximately
$5.80 per share of common stock, subject to adjustment. The initial conversion
price represents a premium of approximately 15% over the closing price of
Cereplast's common stock on NASDAQ Capital Market on May 18, 2011. In addition to
the shares of common stock, holders of the notes will receive, if applicable,
upon conversion an amount in cash equal to the amount of any interest, that would
have accrued under the notes for the period from the then most recent interest
payment date through and including, June 2, 2014, subject to a cap of
approximately two years of interest payments. The notes will be Cereplast's
senior subordinated unsecured obligations which will rank subordinate in right to
payment to all Cereplast's existing and future senior secured indebtedness. The
notes may also be repurchased by Cereplast at the purchaser's option on June 15,
2014 or in connection with a change of control of Cereplast. In addition, if
certain fundamental changes to Cereplast occur, holders of the notes may be
entitled to an increased conversion rate. The closing of the offering is expected
to take place on or about May 24, 2011, subject to the satisfaction of customary
closing conditions.
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.
The securities offered in this financing transaction have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or
applicable state securities laws. Accordingly, the securities may not be offered
or sold in the United States except pursuant to an effective registration
statement or an applicable exemption from the registration requirements of the
Securities Act and such applicable state securities laws. The securities were
offered only to qualified institutional buyers. Pursuant to the terms of the
Purchase Agreement, the Company has agreed to file a registration statement with
the Securities and Exchange Commission registering the resale of the notes issued
in the private placement and the shares of common stock issuable upon conversion
of the notes. Any offering of the Company's securities under the resale
registration statement referred to above will be made only by means of a
prospectus.
This release does not constitute an offer to sell or the solicitation of an offer
to buy the securities, nor shall there be any sale of the securities in any state
in which such offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of such state. Any
offering of the securities under the resale registration statement will only be
by means of a prospectus.
About Cereplast, Inc.
Cereplast, Inc. (CERP) designs and manufactures proprietary bio-based,
sustainable plastics which are used as substitutes for petroleum-based plastics
in all major converting processes - such as injection molding, thermoforming,
blow molding and extrusions - at a pricing structure that is competitive with
petroleum-based plastics. On the cutting-edge of bio-based plastic material
development, Cereplast now offers resins to meet a variety of customer demands.
Cereplast Compostables(R) Resins are ideally suited for single use applications
where high bio-based content and compostability are advantageous, especially in
the food service industry. Cereplast Sustainables(TM) Resins combine high
bio-based content with the durability and endurance of traditional plastic,
making them ideal for applications in industries such as automotive, consumer
electronics and packaging. Learn more at cereplast.com. You may also
visit the Cereplast social networking pages at Facebook.com/Cereplast,
Twitter.com/Cereplast and Youtube.com/Cereplastinc.
Safe Harbor Statement
Matters discussed in this press release contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. When used in
this press release, the words "anticipate," "believe," "estimate," "may,"
"intend," "expect" and similar expressions identify such forward-looking
statements. Actual results, performance or achievements could differ materially
from those contemplated, expressed or implied by the forward-looking statements
contained herein. These forward-looking statements are based largely on the
expectations of the Company and are subject to a number of risks and
uncertainties. These include, but are not limited to, risks and uncertainties
associated with: the impact of economic, competitive and other factors affecting
the Company and its operations, markets, product, and distributor performance,
the impact on the national and local economies resulting from terrorist actions,
and U.S. actions subsequently; and other factors detailed in reports filed by the
Company.
SOURCE: Cereplast, Inc.
Cereplast, Inc.
Public Relations
Nicole Cardi
310-615-1900 x154
ncardi@cereplast.com
or
Lippert/Heilshorn & Associates, Inc.
Investor Relations
Mary Magnani/Tim Dien
415-433-3777
cereplast@lhai.com |
