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Ascendia Brands completes debt restructuring
21
Jan '08
Ascendia Brands Inc announced the closing of an equity investment in the Company and the related restructuring of its senior debt facility. An affiliate of Prentice Capital Management, LP has invested $26.5 million in a newly created class of voting, convertible Series C Preferred Stock.

The amount of the investment includes the conversion of a $2 million unsecured loan previously provided by an affiliate of Prentice in November, 2007. The effective conversion price of the Series C Preferred Stock is $0.1236 per share, which represents a discount of 15 percent off the average closing price of Ascendia's common stock for the ten trading days prior to the approval of the transaction by Ascendia's Board of Directors, which occurred on December 28, 2007.

Ascendia will use the proceeds of the sale to pay down $1.5 million of its First Lien Term Notes, to pay off the current balance of $18,403,258 on its revolving credit facility and for general corporate purposes. The issuance of the Series C Preferred Stock will trigger the anti-dilution provisions of certain outstanding warrants and the Company's secured convertible notes.

Holders of the Series C Preferred Stock have the right to appoint a majority of Ascendia's directors. In connection with the closing of the transaction, Edward J. Doyle, Kenneth D. Taylor and Francis G. Ziegler resigned from the Board and the Company expects to announce replacements shortly.

Concurrently with the sale of the Series C Preferred Stock, Ascendia also entered into an agreement with its senior lenders to re-structure its First and Second Lien loan facilities. Under the terms of the restructuring, Ascendia's lenders have agreed to adjust certain financial covenants through the end of Ascendia's 2009 fiscal year (ending February 28, 2009), and allow for the deferral of certain interest payments.


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