1st Oct 2009 07:00
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For immediate release |
1 October 2009 |
Catalytic Solutions, Inc.
(The "Company")
SALE OF energy systems business
Catalytic Solutions, Inc. (AIM:CTS and CTSU), the company behind Mixed Phase Catalyst (MPC®) technology ("Company"), today announces that it has sold the principal assets and liabilities of its energy systems business, Applied Utility Systems, Inc. ("AUS"), to Johnson Matthey (LSE:JMAT).
Key terms of the transaction are as follows:
A total sale price of US$10 million with US$8.5 million having been paid in cash at signing, US$0.5 million payable contingent upon AUS being awarded certain projects and US$1.0 million retention against certain project and contract warranties and other obligations.
Assets sold include contracts in progress, working capital, intellectual property relating to systems, trade marks and trade names. A settlement will be made between Johnson Matthey and the Company to reflect net working capital.
The Company purchased AUS, a provider of cost-effective, engineered solutions for the clean and efficient utilization of fossil fuels, in 2006. AUS provides emissions control and energy systems solutions for industrial and utility boilers, process heaters, gas turbines and generator sets used largely by major utilities, industrial process plants, OEMs, refineries, food processors, product manufacturers and universities. This business accounted for a loss of US$915,000 for the year ended 31 December 2008, including certain non-recurring expenses of US$530,000 and depreciation and amortization expenses of US$556,000.
Proceeds from the sale of AUS will enable the Company to pay down US$6.8 million of debt. Cycad Group LLC will be repaid the full US$3.3 million owed to them pursuant to a loan agreement with the Company and Fifth Third Bank will be repaid US$3.5 million of the approximately US$10.1 million owed to them pursuant to a loan agreement with the Company.
Following the transaction, Fifth Third Bank, as the Company's sole remaining secured lender, has agreed to extend forbearance on the remaining loan outstanding until 30 November 2009, subject to conditions typical for such forbearance. The Company previously announced on 30 June 2009 that it was in default under these two loan agreements and was negotiating with these lenders to extend forbearance in order to allow the Company to obtain funding. The Directors and management continue to pursue additional options to recapitalise the Company. Alternatives under consideration include the sale of Company stock and/or a sale of the Company's assets.
Following this transaction, the Company expects to have sufficient working capital to operate until the forbearance from Fifth Third Bank ends on 30 November 2009.
At this time the Company cannot provide any assurances that it will be successful in its continuing efforts to recapitalize the balance sheet or in its work with the lender on loan modifications. In the event that the Company is not successful in the immediate future, there is substantial doubt that the Company will be able to continue operations without filing a petition of bankruptcy. There can be no assurances that in that event the Company would be able to reorganize through bankruptcy, and it might be forced to effect a liquidation of its assets.
Commenting on the announcement, Charles F. Call, Chief Executive Officer of Catalytic Solutions, Inc. said: "We are pleased to complete this sale to Johnson Matthey. We believe that the energy systems business is on a firm foundation for future growth and will flourish under its new ownership. This transaction will give the Company more time in which to continue to pursue additional strategies to strengthen further the balance sheet and liquidity position."
For further details, please contact:
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Catalytic Solutions, Inc. Charlie Call, Chief Executive Officer Tel: +1 (805) 639-9463 Steve Golden, Chief Technical Officer Tel: +1 (805) 639-9464 Nikhil Mehta, Chief Financial Officer Tel: +1 (805) 639-9461 |
Canaccord Adams Robert Finlay Guy Blakeney Bhavesh Patel Tel: 020 7050 6500 |
Buchanan Communications Charles Ryland Ben Willey Christian Goodbody Tel: 020 7466 5000 |
About Catalytic Solutions, Inc.
Catalytic Solutions, Inc. is a global manufacturer and distributor of emissions control systems and products, focused in the heavy-duty diesel and light-duty vehicle markets. The Company's emissions control systems and products are designed to deliver high value to our customers while benefiting the global environment through air quality improvement, sustainability and energy efficiency. Catalytic Solutions, Inc. is listed on AIM of the London Stock Exchange (AIM: CTS and CTSU) and currently has operations in the USA, Canada, France, Japan and Sweden as well as an Asian joint venture. The Company's website is www.catalyticsolutions.com.
Related Shares:
Johnson Matthey