By Devika Patel
Knoxville, Tenn., Sept. 18 - Gulfstream International Group, Inc. arranged a $5.1 million private placement of secured original issue discount debentures on Sept. 12 and a $1 million sale of junior subordinated debentures on Sept. 15, according to an 8-K filed Thursday with the Securities and Exchange Commission.
Shelter Island Opportunity Fund, LLC is the investor of the discount debentures. Gulfstream Funding, LLC will buy the junior debentures.
The discount debentures have a three-year term, with an interest rate of the higher of Prime rate plus 4% or 11%, payable monthly.
Additionally, Shelter Island will receive a warrant for 578,870 common shares, exercisable at a nominal price for six years.
The junior debentures will bear interest at 12% and will have a term of 38 months.
Gulfstream will pay $50,000 of accrued interest one year after the closing. The remaining interest on the junior debentures will be payable after two years, after three years and at maturity.
The junior debentures may be converted into common stock at a conversion price of $3.00 per share.
Gulfstream Funding also will receive a warrant for 225,000 common shares, exercisable at $3.20.
Proceeds will be used to repay Gulfstream's line of credit with Wachovia Bank, finance its expansion and provide general working capital.
Gulfstream, based in Fort Lauderdale, Fla., is a holding company.
| Issuer: | Gulfstream International Group, Inc.
|
| Issue: | Secured original issue discount debentures, junior subordinated debentures
|
| Amount: | $6.1 million
|
| Stock symbol: | Amex: GIA
|
|
|
| Discount debentures
|
| Amount: | $5.1 million
|
| Maturity: | Three years
|
| Coupon: | The higher of Prime rate plus 4% or 11%
|
| Price: | Discounted
|
| Yield: | The higher of Prime rate plus 4% or 11%
|
| Warrants: | For 578,870 common shares
|
| Warrant expiration: | Six years
|
| Investor: | Shelter Island Opportunity Fund, LLC
|
| Pricing date: | Sept. 12
|
| Stock price: | $2.40 at close Sept. 12
|
|
|
| Junior debentures
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| Amount: | $1 million
|
| Maturity: | 38 months
|
| Coupon: | 12%
|
| Price: | Par
|
| Yield: | 12%
|
| Conversion price: | $3.00
|
| Warrants: | For 225,000 common shares
|
| Warrant strike price: | $3.20
|
| Investor: | Gulfstream Funding, LLC
|
| Pricing date: | Sept. 15
|
| Stock price: | $2.48 at close Sept. 15
|
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