Estimated net proceeds, after deducting placement agent fees, of $5.6 million from the issuance and sale of the Tranche A notes and related Warrants are expected to be used to (1) purchase approximately $2.6 million of June Debt and an aggregate 3% additional ownership interest in the Pacific Ethanol Plants from existing Plant lenders, for a total purchase price of $2.1 million; and (2) purchase and retire approximately $3.5 million of 2016 Debt from existing Plant lenders at par. The company will also amend the purchased June Debt to extend the debt's maturity date from June 25, 2013 to June 30, 2016.
Estimated net proceeds, after deducting placement agent fees and other expenses in connection with the sale of the Notes, of $6.5 million from the issuance and sale of the Tranche B notes and related Warrants, if approved by the company's stockholders, are expected to be used to (1) purchase the remaining $4.0 million of June Debt from existing Plant lenders at a price to be negotiated; (2) fund $2.0 million in reserves at the parent; and (3) repay a portion of the Senior Notes.
Upon the Tranche A closing, the Pacific Ethanol Plants will also obtain $5.0 million in further availability under an existing credit facility to provide additional liquidity for operations.
The Tranche A and related transactions are subject to the satisfaction of numerous closing conditions and are expected to close within two business days. The Tranche B and related transactions are subject to the satisfaction of numerous closing conditions, including stockholder approval, and are expected to close in June 2013; however, there can be no assurance that the closing conditions will be satisfied and the transactions will close. Lazard Capital Markets LLC served as the sole placement agent for the Tranche A and Tranche B transactions. Additional details are available in the company's Form 8-K, which is scheduled to be filed today with the Securities and Exchange Commission ("SEC").
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