2023-06-13 17:04:06 ET
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Eastside Distilling ( NASDAQ: EAST ) has signed a non-binding term sheet with key first and second lien debt holders that will convert a large portion of its outstanding debt to equity, the company said Tuesday.
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Under the proposed transaction, principal creditors will exchange $6.2 million of debt for equity.
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The debt-to-equity exchange rate is no less than $4.00 per common share equivalent and no more than $4.80 per common share equivalent.
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New equity would be limited to less than 20% of total voting stock, with the balance in new non-voting convertible preferred stock.
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In addition, interest payments on the remaining debt would be restructured, and certain debt maturities would be extended.
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"These changes would have a materially positive impact on cash flow and support the company's growth initiatives, especially in digital can printing," EAST said in a statement.
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Shares -12.5% at $5.39 after hours.
For further details see:
Eastside Distilling shares slide on plans for exchanging debt for equity with lenders