Primary Energy Recycling Corporation Discloses Subsequent Event Affecting First Quarter 2007 Results and Unplanned Turbine Outage Expected to Affect Second Quarter 2007 - Quarterly Results Conference Call Planned for April 30, 2007 Following Release of First Quarter Results

    OAK BROOK, IL, April 25 /CNW/ - Primary Energy Recycling Corporation
(TSX: PRI.UN or the "Company") is disclosing today that it has recently been
informed by Mittal Steel of the results of its physical measurement of the
inventories of coke and coal of Harbor Coal's site host, and that the
resulting inventory adjustment is expected to result in a material reduction
of Harbor Coal LLC ("Harbor Coal") revenues for the first quarter of 2007. The
Company is in the process of reviewing the information provided by Mittal to
make an appropriate reserve for this negative inventory adjustment, which is
expected to be in the range of $2 million to $2.5 million. The reserve will be
included in the first quarter 2007 results which the Company expects to
release prior to markets opening on Monday April 30, 2007.
    John Prunkl, President of Primary Energy Ventures LLC, the Manager of the
Issuer said, "Upon being advised by Mittal of the results of the survey, we
felt that taking an appropriate reserve for the inventory adjustment would be
prudent. A negative annual inventory adjustment was recorded in the fourth
quarter of 2006 which led us to agree with Mittal to begin semi-annual
inventory adjustments which we expected would produce more accurate and less
volatile inventory assessments. Accordingly, we were not anticipating an
adjustment of this size, especially for such a relatively short period of
time, and are in the process of both reviewing the survey results that have
been provided and initiating an independent audit of Mittal's accounting of
fuel and coke usage, including inventory adjustments, as is allowed under the
terms of the PCI Associates' partnership agreement."
    Unrelated to the inventory adjustment at Harbor Coal, a steam turbine
generator failure occurred at the Company's North Lake Energy Project on April
19, 2007. The Company's preliminary assessment of damage to the low pressure
section of the steam turbine is that it could take up to 60 days to repair the
turbine and return North Lake to normal operations. Several alternatives which
might accelerate this schedule and require some repairs at a later date are
under review. No revenue will be earned during the outage. The facility is
insured under a program that requires a $500,000 deductible for machinery
repairs and a 45 day waiting period before lost net earnings begins to be
reimbursed under the business interruption provisions of the policy. It has
not been determined if the damage qualifies for insurance coverage. Revenues
associated with the North Lake outage could be negatively impacted by between
$1 million to $2 million, largely in the second quarter of 2007, if all
repairs are made immediately. We are working with our customer to mitigate the
impact of the outage for both parties.
    Depending on the magnitude of the combined impacts of these two events,
the Company may be required to obtain a waiver of certain indenture and senior
loan covenants to continue the payment of distributions and interest payments.
"While we do not have enough information at this time to determine whether a
waiver will be necessary, the potential magnitude of the inventory adjustment
combined with the loss of revenue associated with the North Lake outage have
led us to initiate discussions with our lenders to determine whether a waiver
would be forthcoming in the event that we need to request one," said Mr.

    Conference Call and Webcast
    Management will host a conference call to discuss the first quarter
results on Monday, April 30, 2007 at 11 a.m. (ET). To participate in the
conference call, please dial (416) 644-3417 or 1-800-732-6179. A conference
call replay will be available until 12 a.m. on May 8, 2007. The replay can be
accessed by dialing (416) 640-1917 or 1-877-289-8525 and entering passcode
21227217 followed by the number sign. A webcast replay will also be available
for 90 days by accessing a link through the Investor Information section at

    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 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.

    About Primary Energy Recycling Corporation

    The Issuer 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 1,851 Mlbs/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

For further information:

For further information: V. Michael Alverson, Vice President and CFO,
Primary Energy Ventures LLC, (630) 371-0639,

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