NutraCea secures financing for projects
October 20, 2008
by Eric Schroeder
PHOENIX — NutraCea announced it has completed a proposal letter to obtain a $10 million credit facility through Wells Fargo Bank and has entered into definitive agreements with two institutional investors for the purchase of $5 million of newly issued Series D Convertible Preferred Stock and five-year warrants to purchase up to 4,545,455 shares of NutraCea common stock.
"Given the current economic environment and the effect it is having on companies ability to access the capital markets, we were pleased to obtain this loan facility proposal with Wells Fargo, as well as additional funds through a preferred offering," said Brad Edson, chief executive officer and president of NutraCea. "This financing will provide the working capital necessary to complete all projects that we currently have under construction."
The projects under way include the initial expansion of Irgovel, NutraCea’s Brazilian facility, from its current capacity of 70,000 tons of annual production to approximately 115,000 tons of annual capacity by the end of March 2009. In addition, NutraCea said it plans to use some of the bank funds to complete the construction of the first 5,000 tons of annualized production at its Phoenix facility and the addition of 1,500 tons of capacity scheduled to come on line early next year, for a total annualized production capacity of 6,500 tons by the second quarter of 2009.
"We are moving forward with our first China-based production facility," Mr. Edson said. "The first phase of development in China is anticipated to require less than 15% of the total capital required. The balance of the financial commitment can be done in tranches over a period of up to two years. Currently, we expect construction in China to begin during the first quarter of next year."