Primary Energy Recycling Corporation Announces Amendment to Credit Facility and Completion of Recapitalization



    OAK BROOK, IL, Aug. 24 /CNW/ - Primary Energy Recycling Corporation (TSX:
PRI.UN) (the "Company") is pleased to announce today that it has reached an
agreement with its lenders to amend and extend its US$131 million term loan
facility (the "Term Loan") for six months (the "Amendment"). The Amendment
will extend the scheduled maturity date of the Term Loan from August 24, 2009
to February 24, 2010. A copy of the Amendment will be filed and available for
review on SEDAR at www.sedar.com. The Amendment is a significant and positive
step in the Company's efforts to secure long-term refinancing.
    The Company is also pleased to announce that it has entered into a term
sheet with certain significant securityholders of the Company to provide a
standby commitment of US$50 million for a rights offering by the Company. The
Company's goal is to place a smaller US$90-US$100 million loan or bond
issuance, the net proceeds of which would be used, in conjunction with the net
proceeds from a rights offering, to refinance the amended Term Loan. Although
the extended maturity date of the Term Loan is February 24, 2010, the Company
will be actively working to close both the rights offering and new debt
financing by year end.
    "With a successful 99% securityholder vote supporting the
recapitalization of the Company, the 100% approval from the lenders to amend
and extend our Term Loan, the continued recovery in steel production at our
host's mills (including another host blast furnace restart announced this
week), improvement in the credit and bond markets, the opportunity to place a
rights offering supported by existing shareholders, restructuring the
management agreement with EPCOR and reducing the amount of overall debt, the
Company has positioned itself for long-term success" said CEO, John Prunkl.
"Achieving all these objectives has been a monumental undertaking and although
much work remains, we have built strong momentum towards achieving our
remaining goals."
    The effectiveness of the Amendment was conditional on, among other
things, the completion of the previously announced recapitalization
transaction (the "Recapitalization") that was approved by the Company's
securityholders on August 10, 2009 and by the Supreme Court of British
Columbia on August 12, 2009. The Recapitalization was completed earlier today.
As a result of the Recapitalization, all of the Company's outstanding 11.75%
subordinated notes (the "Subordinated Notes") were converted into common
shares of the Company (the "Existing Common Shares") on the basis of sixteen
(16) Existing Common Shares for every Cdn$2.50 principal amount of
Subordinated Notes and all of the outstanding Existing Common Shares
(including those issued on the conversion) were consolidated on the basis of
one (1) new Common Share (the "New Common Shares") for every seventeen (17)
Existing Common Shares. Holders of Subordinated Notes as of the effective time
of the Recapitalization will receive an interest payment of approximately
Cdn$0.01816 per Cdn$2.50 principal amount of Subordinated Notes representing
interest for the period from August 1 to August 23, 2009. Holders of
Subordinated Notes as of the previously announced record date of July 31, 2009
will also receive an interest payment of approximately Cdn$0.02448 per
Cdn$2.50 principal amount of Subordinated Notes representing interest for the
period from July 1 to July 31, 2009.
    Following completion of the Recapitalization, the Company's outstanding
share capital consists of approximately 38 million New Common Shares and each
enhanced income security of the Company ("EIS") has been replaced by one New
Common Share. The New Common Shares are expected to commence trading on the
Toronto Stock Exchange ("TSX") under the symbol "PRI" on Wednesday, August
26th and at the same time, the EISs will be delisted from the TSX. The EISs
traded in the "book-entry only" system of CDS Clearing and Depository Services
Inc. and no certificates for the New Common Shares will be issued to
beneficial holders. Beneficial holders of EISs do not need to take any action
in order to receive the New Common Shares to which they are entitled.
Concurrently with the completion of the Recapitalization, the capital
structure of Primary Energy Recycling Holdings LLC was amended to replicate
the effects of the Recapitalization.
    On completion of the Recapitalization, the Company and EPCOR USA Ventures
LLC, among others, entered into an amended and restated management agreement
(the "Amended and Restated Management Agreement"). The Amended and Restated
Management Agreement gives the Company management independence, greater
control of the business and increased flexibility to explore new opportunities
that are in the best interests of shareholders going forward. Further, under
the new termination provisions of the Amended and Restated Management
Agreement, the Company will have the ability to become completely independent
in the future. A copy of the Amended and Restated Management Agreement will be
filed and available for review on SEDAR at www.sedar.com.
    The Amendment and the completion of the Recapitalization are positive
steps in the Company's efforts to secure longer-term refinancing of the Term
Loan. While the Company intends to work diligently towards securing committed
longer-term refinancing of the Term Loan, there can be no assurance that the
Company will be able to secure such refinancing.

    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 the successful refinancing of the amended Term Loan, its timing and impact
on the business, operations and financial condition of the Company; other
risks associated with achieving the anticipated benefits of longer-term
refinancing of the Term Loan, the Recapitalization and the Amended and
Restated Management Agreement; and the factors discussed in the Company's
public filings available on SEDAR at www.sedar.com. These forward-looking
statements are made as of the date of this press release and, except as
required by applicable securities laws, the Company assumes no obligation to
update or revise them to reflect new events or circumstances.

    About Primary Energy Recycling Corporation

    The Company owns a majority interest in Primary Energy. Primary Energy,
headquartered in Oak Brook, Illinois, indirectly owns and operates four
recycled energy projects and a 50 per cent 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 see www.primaryenergyrecycling.com.





For further information:

For further information: V. Michael Alverson, Chief Financial Officer,
Primary Energy Recycling Corporation, (630) 371-0639,
investorinfo@primaryenergy.com

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Primary Energy Recycling Corporation

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