American DG amends 6% convertibles to pay interest in shares, not cash

Company could save about $3.5 million in cash through modification

By Devika Patel

Knoxville, Tenn., March 13 - American DG Energy Inc. said it has agreed to pay interest on its senior unsecured convertible debentures in shares instead of cash. The convertibles were sold in private placements on May 23, 2011 and Nov. 30.

The 6% debentures are due May 25, 2018 and were initially convertible into common stock at $2.20 per share. The amendment to the interest payments will be for interest paid in 2012, 2013 and 2014.

For the May semi-annual interest payment, the company will use the April average daily closing price of the stock to determine the conversion price, and for the November semi-annual interest payment, it will use the October average daily closing price of the stock to determine the conversion price.

"This change in the terms of our debentures will save the company approximately $3.5 million in cash," chief executive officer John N. Hatsopoulos said in a press release. "We can now take this amount and deploy it towards the installation of more energy systems and aggressively grow our revenue."

Based in Waltham, Mass., American DG Energy distributes and operates clean, onsite energy systems that produce electricity, hot water, heat and cooling.

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