This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Cereplast Announces $12,500,000 Private Placement

Stocks in this article: CERP

Cereplast, Inc. (NASDAQ: 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.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,805.41 +127.51 0.76%
S&P 500 1,964.58 +13.76 0.71%
NASDAQ 4,483.7150 +30.9230 0.69%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs