Primary Energy Recycling Corporation Announces Likely Default to Credit Agreement and Suspension of Distributions
OAK BROOK, IL, Nov. 6 /PRNewswire-FirstCall/ — Primary Energy Recycling Corporation (TSX: PRI.UN) has received preliminary inventory adjustment information from the site host of its Harbor Coal facility. If this information proves to be accurate, which the Company believes will be the case, the Company’s financial results for the period ended September 30, 2007 will demonstrate failure to comply with the PERC Consolidated Leverage Ratio covenant and cause a default under the Company’s senior debt Credit Agreement. Under the terms of the Credit Agreement, the Company will be precluded from paying interest to holders of its Separate Subordinated Notes and from making distributions to holders of its enhanced income securities (“EISs”) unless such default is waived by Senior Lenders. This situation results from the cumulative effect of poor financial performance at the Harbor Coal facility during the past four quarters and the financial impacts of the unplanned outages at the North Lake facility earlier this year. John Prunkl, President of Primary Energy Ventures LLC, the Manager of the Company, said “We have made the Senior Lenders aware of the situation and will work diligently towards obtaining a waiver in the event of a covenant default. While the timing and results of the waiver process are uncertain, we are committed to ensuring the interests of our shareholders are protected.”
The Company is scheduled to release the financial results for the period ended September 30, 2007 on November 14, 2007 and plans to host an investor conference call at 11:00 am EST that day. This subject will be more thoroughly discussed and updated at that time.
Each EIS consists of one common share of the Company (a “Common Share”) and one 11.75% subordinated note of the Company having a par value of Cdn$ 2.50 (the “Subordinated Note”). The EISs trade on the Toronto Stock Exchange under the symbol PRI.UN.
The Company owns a majority interest in Primary Energy Recycling Holdings LLC (“Primary Energy”). Primary Energy, headquartered in Oak Brook, Illinois, indirectly owns and operates four recycled energy projects and a 50% interest in a pulverized coal facility (collectively, the “Projects”). The Projects have a combined electrical generating capacity of 283 megawatts and a combined steam generating capacity of 1.8 MMlbs/hour. Primary Energy creates value for its customers by capturing and recycling waste energy from industrial and electric generation processes and converting it into reliable and economical electricity and thermal energy for its customers’ use. For more information, please visit us at http://www.primaryenergyrecycling.com/ .
Forward-Looking Statements
When used in this news release, the words “anticipate”, “expect”, “project”, “believe”, “estimate”, “forecast” and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks, uncertainties and assumptions pertaining, but not limited, to operating performance, regulatory parameters, weather and economic conditions and the factors discussed in the Company’s public filings available on SEDAR at http://www.sedar.com/. These forward-looking statements are made as of the date of this press release and the Company assumes no obligation to update or revise them to reflect new events or circumstances.
Primary Energy Recycling Corporation
CONTACT: V. Michael Alverson, Chief Financial Officer, Primary EnergyVentures, (630) 371-0639, investorinfo@primaryenergy.com