American DG cuts convertible debt to $3.4 million from $17.7 million

Company swaps EuroSite Power shares for outstanding 6% convertibles

By Devika Patel

Knoxville, Tenn., Aug. 10 – American DG Energy Inc. said it has agreed to reduce its convertible debt to $3.4 million from the $17.7 million of debt outstanding at the end of 2015. The reduction is set to be completed in the fourth quarter of 2016.

The company will exchange about 9.7 million common shares in EuroSite Power Inc. for a portion of its outstanding 6% convertible debentures due May 2018. A further 5.5 million EuroSite Power shares will be sold for cash at $0.40 per share, with the proceeds used to prepay additional convertible debt. In conjunction with the transactions, 1.02 million warrants, which were set to expire in October 2017, will also be cancelled.

The remaining convertible debt will be restructured to carry zero coupon and retain the original May 2018 maturity.

“Although various adverse factors may have influenced the terms of this deal, we believe it absolutely remained in the best interests of American DG Energy shareholders to reduce the debt burden of the company and minimize any potential shareholder dilution that may have resulted from the conversion of these securities,” the company’s co-chief executive officer, John Hatsopoulos, said in a press release.

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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