American Dairy repays 75% of its 1% convertibles ahead of schedule

By Devika Patel

Knoxville, Tenn., Sept. 1 - American Dairy, Inc. reported that it has paid down $33.95 million, or 75%, of the fourth and final $46 million installment of its 1% guaranteed senior secured convertible notes due 2012.

The notes, which were held by Citadel Equity Fund Ltd., were paid off ahead of the scheduled Oct. 15 deadline.

Had it waited until October, the company would have been required to pay $34.5 million for the notes, but the parties have agreed that Citadel was paid in full when it received $33.95 million on Aug. 31.

The remaining $11.5 million in 2012 note payments will be repaid by the end of October.

"We are very pleased with our agreement with Citadel to retire their 2012 notes, which will allow us to improve our capital structure and create additional cost savings for the company," American Dairy's chief financial officer, Jonathan Chou, said in a press release.

"Today's announcement is consistent with our ongoing efforts to strengthen our balance sheet and further enhance our financial flexibility to help us support our ongoing growth in this unique and dynamic infant milk formula market."

Based in Beijing, American Dairy produces and distributes milk powder and soybean products in China.

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