Granite City Food & Brewery Ltd. (NASDAQ: GCFB) today announced that it has completed the previously announced transaction with Concept Development Partners LLC (“CDP”). The Company issued $9.0 million of newly issued convertible preferred stock to CDP, entered into a $10.0 million credit agreement with the Structured Finance Group of Fifth Third Bank providing for senior credit facilities, repurchased 3 million shares of common stock from DHW Leasing, L.L.C. (“DHW”) for approximately $7.1 million, and purchased real property in Troy, Michigan from DHW for approximately $2.6 million.
The Company sold 3 million shares of Series A Convertible Preferred Stock to CDP, each share of which is convertible into two shares of Granite City common stock, equivalent to a conversion price of $1.50 per share. The preferred stock carries a dividend rate of 9% per year through December 31, 2013, which will be paid half in cash and half in the form of newly issued common stock. CDP has become Granite City’s largest shareholder as a result of these transactions.
The preferred stock issuance and the common stock repurchase were completed pursuant to the previously announced stock purchase agreement with CDP and stock repurchase agreement with DHW, both of which received approval from Granite City’s shareholders earlier today. The other transactions were conditions to closing the preferred stock issuance. Closing of these transactions resulted in a change in control of the Company, including changes at the board and senior management levels.
Granite City’s President and Founder Steven J. Wagenheim said, “We are very pleased to have completed these transactions. We expect to deploy these new funds to generate additional revenue through store enhancements and new store growth within our existing geographic footprint. We are analyzing potential new restaurant sites and believe that this transaction will be the catalyst for a new and exciting growth period for Granite City.”