Ener1 announces financial adjustments with Notes, shareholder credit

September 13, 2011 – PRNewswire — Energy storage system supplier Ener1 Inc. (NASDAQ:HEV) will restructure its 8.25% Senior Amortizing Notes with Goldman Sachs Asset Management L.P. and other Note holders. Ener1’s primary shareholder, BzinFin S.A., has extended the maturity of its $15-million line of credit from November 2011 to July 2013.

In the Note restructuring, the $58.5 million outstanding principal amount will be divided into two $29.25 million tranches (A and B below). Each will be convertible at the investor’s option into shares of Ener1’s common stock. 

The conversion price for the Tranche A Notes will be fixed at approximately $0.66, or 175% of the 5-day volume-weighted average price (VWAP) of Ener1’s common stock, for the period ending August 30, 2011.

The conversion price for the Tranche B Notes will be fixed at $2.00, subject to a downward adjustment if such Notes are not redeemed by January 31, 2012 to the lower of the conversion price for the Tranche A Notes or the 5-day VWAP of Ener1’s common stock for the period ending January 31, 2012.

Additional terms of the restructuring include:

The amortization payment due on October 1, 2011 will be made in 50% cash and 50% stock. The requirement to maintain a minimum cash balance has been reduced from the $12 million to the lower of $6 million or 15% of the principal amount of Notes outstanding. Note holders will receive an additional 1.4 million in warrants to purchase Ener1 stock at a strike price of $0.3752 per share. The existing warrants held by the note holders will also be reset to this strike price.

The restructured Notes lend Ener1 more “flexibility” in pursuit of business goals, said Charles Gassenheimer, chairman and CEO. More details will be available once the company completes its restatement of financial statements.

Ener1 Inc. is a publicly traded (NASDAQ:HEV) energy storage technology company that develops compact, lithium-ion-powered battery solutions for the utility grid, transportation and industrial electronics markets. For more information, visit Ener1’s website at www.ener1.com.


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