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BOCA RATON-US Plastic Lumber Inc. has raised $4 million in working capital through a private stock placement with Halifax Fund. The Cayman Islands-based limited partnership, managed by Palladin Group, earlier this year claimed beneficial ownership of 3.8 million shares or 9.9% of the outstanding publicly traded shares in US Plastic.

“This transaction completes the critical first step of our commitment to refinance USPL’s existing capital structure,” John W. Poling, US Plastic chief financial officer, says in a prepared statement.

“We believe that with this financing in place, USPL can move forward with several equipment and real estate transactions that would further strengthen our balance sheet and allow us to refinance our existing senior debt on more favorable economic terms.”

Under terms of the deal, Halifax agreed to certain standstill provisions related to a $7.5 million debenture US Plastic Lumber issued earlier this year.

Halifax may convert up to $2 million in US Plastic Lumber common stock through the debenture and agreed to delay any further conversions for up to six months–except on days when the stock trades higher than $3 a share. Shares closed up two cents Tuesday at $1.11 on volume of 119,000.

“We expect that these provisions will reduce potential overhang on the company stock,” Mark S. Alsentzer, US Plastic Lumber president and chief executive officer, says in the same statement.

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