CAMBRIDGE, Mass., August 28, 2009 – Verenium Corporation (NASDAQ: VRNM) announced today that it has entered into privately negotiated exchange agreements with certain existing holders of its 5.5% Convertible Senior Notes due 2027 (the “5.5% Notes”). Pursuant to the agreements, existing holders of the 5.5% Notes have agreed to exchange approximately $28.5 million in aggregate principal of the 5.5% Notes, for approximately $12.8 million of 9% Convertible Senior Secured Notes due 2027 (the “New Notes”). Lazard Middle Market LLC acted as a financial advisor to the Company for this transaction.
Additional terms relating to the exchange of the original 5.5% Notes and the New Notes include:
An exchange ratio of 45%, meaning that for each $1,000 of original 5.5% Notes exchanged, the holder will receive $450 of New Notes;
The right to convert the New Notes into common stock of the Company at a conversion price of $.80 per share;
An interest rate of 9% per annum, payable in cash or common stock at the Company’s discretion;
A security interest in certain assets of the Company as collateral for the New Notes, which security interest will be pari passu with a security interest being provided by the Company in the same collateral to holders of the Company’s amended and restated 8% Convertible Senior Notes due 2012; and
The New Notes permit the Company to incur unlimited additional debt, secured or unsecured, with up to $50 million of secured debt having priority in the collateral of the New Notes.
“Through this exchange we reduce our debt and create additional financial flexibility, which are critical as we continue to build a leading next-generation biofuels and specialty enzymes business,” said Carlos A. Riva, President and Chief Executive Officer at Verenium. “We are pleased to have taken this opportunity to further strengthen our balance sheet and create a more appropriate capital structure to support the Company’s future growth and continued success,” said James E. Levine, Chief Financial Officer at Verenium. “Reducing the face amount of the New Notes by 55% compared to the 5.5% Notes being exchanged, and creating the potential for further debt reduction through future conversions of the New Notes into equity at a premium to the current stock price, is an important step forward for Verenium.”
The material terms of the exchange and the New Notes will be described in more detail in the Company’s Current Report on Form 8-K, to be filed with the Securities andExchange Commission as soon as practicable following finalization of the associated transaction documentation. This press release is not an offer to sell or the solicitation of an offer to buy any securities, nor shall it constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. About Verenium Verenium Corporation is a leader in the development and commercialization of cellulosic ethanol, an environmentally-friendly and renewable transportation fuel, as well as high-performance specialty enzymes for applications within the biofuels, industrial, and animal health markets. The Company possesses integrated, end-to-end capabilities and cutting-edge technology in pre-treatment, novel enzyme development, fermentation and project development for next-generation biofuels. Through a joint venture with BP, the Company is moving rapidly to commercialize its proprietary technology for the production of ethanol from a wide array of non-food feedstocks, including dedicated energy crops, agricultural waste, and wood products. In addition to the vast potential for biofuels, a multitude of large-scale industrial opportunities exist for the Company for products derived from the production of low-cost, biomass-derived sugars.
Verenium's Specialty Enzyme business harnesses the power of enzymes to create a broad range of specialty products to meet high-value commercial needs. Verenium's world class R&D organization is renowned for its capabilities in the rapid screening, identification, and expression of enzymes-proteins that act as the catalysts of biochemical reactions. For more information on Verenium, visit http://www.verenium.com.
Additional terms relating to the exchange of the original 5.5% Notes and the New Notes include:
An exchange ratio of 45%, meaning that for each $1,000 of original 5.5% Notes exchanged, the holder will receive $450 of New Notes;
The right to convert the New Notes into common stock of the Company at a conversion price of $.80 per share;
An interest rate of 9% per annum, payable in cash or common stock at the Company’s discretion;
A security interest in certain assets of the Company as collateral for the New Notes, which security interest will be pari passu with a security interest being provided by the Company in the same collateral to holders of the Company’s amended and restated 8% Convertible Senior Notes due 2012; and
The New Notes permit the Company to incur unlimited additional debt, secured or unsecured, with up to $50 million of secured debt having priority in the collateral of the New Notes.
“Through this exchange we reduce our debt and create additional financial flexibility, which are critical as we continue to build a leading next-generation biofuels and specialty enzymes business,” said Carlos A. Riva, President and Chief Executive Officer at Verenium. “We are pleased to have taken this opportunity to further strengthen our balance sheet and create a more appropriate capital structure to support the Company’s future growth and continued success,” said James E. Levine, Chief Financial Officer at Verenium. “Reducing the face amount of the New Notes by 55% compared to the 5.5% Notes being exchanged, and creating the potential for further debt reduction through future conversions of the New Notes into equity at a premium to the current stock price, is an important step forward for Verenium.”
The material terms of the exchange and the New Notes will be described in more detail in the Company’s Current Report on Form 8-K, to be filed with the Securities andExchange Commission as soon as practicable following finalization of the associated transaction documentation. This press release is not an offer to sell or the solicitation of an offer to buy any securities, nor shall it constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. About Verenium Verenium Corporation is a leader in the development and commercialization of cellulosic ethanol, an environmentally-friendly and renewable transportation fuel, as well as high-performance specialty enzymes for applications within the biofuels, industrial, and animal health markets. The Company possesses integrated, end-to-end capabilities and cutting-edge technology in pre-treatment, novel enzyme development, fermentation and project development for next-generation biofuels. Through a joint venture with BP, the Company is moving rapidly to commercialize its proprietary technology for the production of ethanol from a wide array of non-food feedstocks, including dedicated energy crops, agricultural waste, and wood products. In addition to the vast potential for biofuels, a multitude of large-scale industrial opportunities exist for the Company for products derived from the production of low-cost, biomass-derived sugars.
Verenium's Specialty Enzyme business harnesses the power of enzymes to create a broad range of specialty products to meet high-value commercial needs. Verenium's world class R&D organization is renowned for its capabilities in the rapid screening, identification, and expression of enzymes-proteins that act as the catalysts of biochemical reactions. For more information on Verenium, visit http://www.verenium.com.
