Mudrick-Backed NJOY Lines Up Loan After Trump Seeks Vaping Curbs
Mudrick-Backed NJOY Lines Up Loan After Trump Seeks Vaping Curbs
(Bloomberg) -- E-cigarette maker NJOY Holdings Inc. is getting about $112 million through a new first-lien loan after President Donald Trump’s threat to curtail vaping hindered an earlier attempt to raise funds, according to a person with knowledge of the situation.
The money comes mainly from family offices and is structured as pay-in-kind debt with a 10% interest rate and a five-year maturity, said the person, who asked not to be identified discussing the private deal.
Holders of the debt have the ability to convert it into equity at a total enterprise value of $2.5 billion, with the debt secured by all of the company’s assets, the person said.
NJOY is seeking to raise a total of $330 million in debt facilities. The $112 million is part of a first tranche expected to close Jan. 3, the person said.
The company, based in Scottsdale, Arizona, is controlled by hedge fund Mudrick Capital Management. Representatives for NJOY didn’t immediately respond to a message seeking comment. Mudrick’s firm declined to comment.
NJOY was in talks earlier this year for an equity fundraising at a valuation of as much as $5 billion, Bloomberg previously reported. Those talks were disrupted in September when the Trump administration surprised many in the industry by pledging to take steps to remove almost all flavored e-cigarette products from the market.
--With assistance from Adam Cataldo.
To contact the reporter on this story: Josh Saul in New York at jsaul15@bloomberg.net
To contact the editors responsible for this story: Rick Green at rgreen18@bloomberg.net, Shannon D. Harrington
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