Utah, United States [RenewableEnergyWorld.com] Raser Technologies Inc. announced the signing of a line of credit agreement, pursuant to which Raser may borrow up to US $15 million. Raser signed the credit agreement with a syndicate of four lenders, including an entity controlled by the company’s chairman, Kraig Higginson. The company obtained the line of credit in order to provide working capital for general corporate purposes.
Under the agreement, advances to Raser are subject to the final approval of the lenders and accrue interest at the rate of 10% per year. Unless the lenders agree to a later date, the line of credit will mature and amounts borrowed must be repaid by November 15, 2009.
Under the agreement, each lender will also receive warrants to purchase Raser’s common stock for each advance of funds made under the line of credit. The number of warrants will be equal to 50% of the total amounts funded by the lender divided by the price of our common stock at the time of the advance. The warrants will have an exercise price of US $6.00 per share of common stock.
“This credit agreement helps to prudently fund our growth and development during these challenging economic times,” said Martin Petersen, Raser’s CFO. “We will continue to explore other non-equity based financial structures to provide the capital to complete our 2009 projects and initiate the development of additional future projects. Our ability to continue to access capital in this economy underscores the importance of renewable energy projects and our ability to complete geothermal projects quickly.”