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Umami Sustainable Seafood Inc. (OTCBB:UMAM) ("Umami" or "the Company"), a holding company of fish farming operations supplying sashimi-grade Northern Bluefin Tuna to the global market, announces that AMERRA Capital Management, LLC ("AMERRA"), as agent on behalf of its managed funds and accounts, has agreed to supply Umami with a loan for working capital in the amount of $8.5 million.
The loan will be funded in three tranches. The first of these was provided on September 7, 2011 in the amount of $5,080,000. The second and third tranches, in the amounts of $1,150,000 and $2,150,000, respectively, will be funded upon satisfaction of certain funding conditions including Umami's delivery of additional collateral to AMERRA. In conjunction with the loan, Umami has issued warrants to purchase 500,000 shares of the Company's common stock at $1.50 per share.
The proceeds have been used for the repayment of existing $3.1 million of the Company's debt, as well as for general working capital for growth and reinforcement of the Company's infrastructure at its Baja Aqua Farms facility in Mexico. Umami acquired Baja Aqua Farms in late 2010, essentially doubling the size of the Company's operations and biomass. Umami has sought to obtain medium-term financing to further enhance its biomass growth and infrastructure. The loan bears interest at a rate equal to one-year LIBOR plus 11% p.a., and secured with certain assets owned by Umami. The notes mature beginning in November 2011 with any unpaid amounts fully due by April 2, 2012.
Additionally, Umami and AMERRA are currently in discussions for a potential medium term revolving loan to start in 2012 with a maturity of up to three years. If finalized, these proceeds would be used to fund the further growth of Umami's operations.
Oli Valur Steindorsson, Umami's Chairman and CEO, said, "The receipt of this loan, along with the potential for additional medium-term funding, reduces Umami's reliance on related parties and could provide Umami with an opportunity for stronger growth in our Mexico operations over the next three years."
Craig A. Tashjian, Managing Director of AMERRA, said, "Umami has an interesting business model with healthy gross margins, yet the model requires a significant supply of working capital to maximize the value of its Bluefin Tuna farming operations. We are excited to be part of the solution that will assist Umami to manage its long-term biomass growth, feeding and sales programs in an effort to maximize its revenues and ultimately its market capitalization. We look at this as a small first step in our collaboration with Umami, all legal groundwork, due diligence and background checks for what should follows has already been done in this first step. We are optimistic that Baja Aquafarms will fulfill preset conditions needed to go to the next phase of the collaboration."
SOURCE: prnewswire
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