OAK BROOK, IL, Nov. 8 /CNW/ - Primary Energy Recycling Corporation (the
"Company") (TSX: PRI.UN) announced today that it has received confirmation of
the inventory adjustment relating to the Company's Harbor Coal facility and
that the adjustment will result in the Company's noncompliance with the PERC
Consolidated Leverage Ratio covenant under its senior debt Credit Agreement.
The Company would have satisfied this covenant if its revenue for the twelve
month period ended September 30, 2007 had been approximately $425,000 higher,
less than 1% of the total revenue generated for the period. The default is not
the result of any near term liquidity problem. The Company has sufficient
liquidity to operate the business, including servicing the senior debt and
paying distributions to holders of the Company's Subordinated Notes and EISs
if it obtains a waiver for the default by the senior lenders. A written notice
of default has been delivered to the lenders and a waiver has been requested.
The Company is actively discussing options with its lenders, through
their agent, for waiving the default and permitting payments of distributions
to holders of the Company's Separate Subordinated Notes and EISs.
John Prunkl, President of Primary Energy Ventures LLC, the Manager of the
Company, said, "The reason for the default to the Credit Agreement is driven
by financial metrics and not as the result of failure to service the senior
debt. The fundamentals associated with the Company's non-Harbor Coal assets
are strong and these assets are performing consistent with expectations. Cash
is available for distributions if we are successful with a waiver and are
permitted to release the funds. Further, we continue to negotiate an amendment
to the Harbor Coal contract that simplifies the tolling formula and improves
stability and predictability of cash flow from the project. We are scheduled
to release third quarter results on November 14, 2007 and to host an investor
conference call on that day. We will update these matters at that time."
Each EIS consists of one common share of the Company (a "Common Share")
and one 11.75% subordinated note of the Company having a par value of
Cdn$ 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 www.primaryenergyrecycling.com.
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 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.
For further information:
For further information: V. Michael Alverson, Chief Financial Officer,
Primary Energy Ventures, (630) 371-0639, firstname.lastname@example.org