Maui Land & Pineapple Co. said it expects to close on the private placement of $40 million of financing later this month that it will use to pay down higher interest debt and for working capital.

The company has entered into definitive agreements for a private placement of financing's convertible notes to institutional investors. The notes can be converted to the company's common stock at a price of $33.50 each and are secured by the company's assets.

Robert Webber, Maui Land & Pineapple chief operating officer and chief financial officer, said $10 million of the offering will be used to replace higher interest debt the company has though a revolving credit line with Wells Fargo Bank N.A. Webber said the debt being paid off has an interest rate that is a full percentage point higher than the 5.875 percent notes being issued through the private placement.

He said the remainder of the offering proceeds will be used as working capital by the Kahului-based company.