Unprofitable Brewery Borrows Even More!"The (4.3M) Second Lien Financing will bear interest rates at prime plus 550-basis points and increases to a prime plus 750-basis points as of April 2, 2022, until maturity. The maturity date on the Second Lien Financing is December 2, 2023."
Hopefully thats a typo and its April 2, 2023.
How the board thought taking on even more debt would help the company is beyond me?
The debt is short term with a very high interest rate (will be over 14% next April!)
This puts the company in an even more precarious position.
What should the company have done?
1) Issue common stock
2) Issue preferred shares with "PIK common stock" dividends