16.01.08

16.1.2008: Meldung: GS CleanTech Executes Financing and Restructuring Agreements

GS CleanTech Corporation announced its execution on January 11, 2008 of comprehensive agreements with its senior creditor, YA Global Investments, L.P., for new financing to support the construction of GS CleanTech"s patent-pending corn oil extraction systems, the restructuring of all prior financing extended by YA Global to GS CleanTech and its subsidiaries, and the completion of the restructuring of the GreenShift portfolio of technologies and companies.

Detailed information on each of these transactions will be filed with the Securities and Exchange Commission on a Form 8K by GS CleanTech and its publicly-held subsidiaries. A summary of the key highlights of the new agreements is provided here:

1.
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Non-Convertible $10 Million Revolving Line of Credit
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The Credit Agreement signed on January 11 provides a $10 million revolving credit line to a wholly-owned special purpose subsidiary of GS CleanTech. The new revolving line of credit has an initial term of 20 months, bears interest at 20% per year and is not convertible into GS CleanTech equity. GS CleanTech will use the facility to construct 7 new corn oil extraction systems over the next 6-9 months, and then additional systems after the first 7 start generating cash flows.
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Once they are built and brought online later this year, the new 7 systems will extract a total of about 10.5 million gallons of crude corn oil per year from the following corn ethanol facilities:
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-- Global Ethanol, LLC, Lakota, Iowa
-- Global Ethanol, LLC, Riga, Michigan
-- Central Indiana Ethanol, LLC, Marion, Indiana
-- Western New York Energy, LLC, Mount Morris, New York
-- Northeast Biofuels, LP, Fulton, New York
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The 7 new systems will supplement GS CleanTech"s currently operating corn oil extraction system at Utica Energy, LLC in Oshkosh, Wisconsin. In addition, GS CleanTech has contracted to build an additional 14 corn oil extraction systems for operating ethanol facilities, and will commence installation of those 14 as soon as additional financing can be obtained. The remainder of GS CleanTech"s backlog consists of another 9 extraction systems that are slated for ethanol plants that are either in construction or pre-construction.
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Each of GS CleanTech"s corn oil extraction systems is designed to produce about 1.5 million gallons per year of crude corn oil and, at current market prices, EBITDA of $0.70 to $0.80 per gallon, or $1.05 million to $1.2 million per system per year - for at least the initial ten year term of GS CleanTech"s client agreements.
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2.


Restructuring and Repayment of Previously Issued GS CleanTech Convertible Debentures
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GS CleanTech previously issued a number of convertible debentures to YA Global. As previously issued, the current balance outstanding under these debentures of about $8.9 million was for the most part convertible into GS CleanTech common stock at a rate equal to 90% of the market price for GS CleanTech common stock at the time of each conversion.
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In connection with the creation of the new credit facility, GS CleanTech and YA Global entered into agreements to amend and restate the repayment and conversion terms of each of these debentures. The revised debt instruments provide for conversion at YA Global"s option at a fixed conversion price of $1.25 per share and the repayment by GS CleanTech of $250,000 per month in the form of cash or, at GS CleanTech"s option, GS CleanTech common stock at 90% of market. The restated debentures are due December 31, 2011 and bear interest at 10% per annum.
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In return for YA Global"s financial accommodations, and in lieu of significant warrants, GS CleanTech agreed to issue 6 million common shares to YA Global. These shares equate to about 4.9% of GS CleanTech"s issued and outstanding common shares.
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3.


Redemption by GS EnviroServices

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GS CleanTech, its majority-owned GS EnviroServices, Inc (OTC Bulletin Board: GSEN) subsidiary, and YA Global also executed a series of documents pursuant to which GS EnviroServices issued $2 million in convertible term notes to YA Global in return for (a) the redemption by GS EnviroServices of 8,733,333 shares of GS EnviroServices common stock from GS CleanTech and (b) the reduction of GS CleanTech"s $8.9 million in debt with YA Global to $6.9 million.
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In addition, GS CleanTech agreed to give GS EnviroServices the option to redeem GS CleanTech"s remaining 6,266,667 shares in GS EnviroServices for $1 million if redeemed within 120 days and for $1.5 million thereafter. All proceeds from the redemptions above will be applied on a dollar for dollar basis to the reduction of GS CleanTech"s convertible debt with YA Global.
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At the conclusion of these transactions, GS EnviroServices will no longer be a majority-held subsidiary of GS CleanTech and the results of GS EnviroServices operations will no longer be consolidated with the results of GS CleanTech"s operations.
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4.


Consent to Completion of GS AgriFuels Go-Private Transaction
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GS CleanTech and GS AgriFuels previously announced GS CleanTech"s plan to transfer its interest in the capital stock of GS AgriFuels to a new wholly-owned subsidiary of GS CleanTech. After the transfer, the new GS CleanTech subsidiary will merge GS AgriFuels into itself in accordance with the short-form merger procedures provided in Section 253 of the Delaware General Corporation Law. All minority shareholders of GS AgriFuels will receive a cash payment of $0.50 per share as a result of the merger and will cease to be shareholders of GS AgriFuels.
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On January 11, 2008, YA Global, GS CleanTech and GS AgriFuels entered into an agreement (the "Go Private Agreement") pursuant to which YA Global granted its consent to the completion of these transactions. GS CleanTech and GS AgriFuels consequently expect a definitive date for the merger will be declared during January 2008, and that both the merger and the $0.50 per share cash distribution will be completed prior to the end of February 2008. GS AgriFuels will then no longer be a public company.
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Under the terms of the Go Private Agreement, GS CleanTech agreed to use its best efforts to have an appraisal completed to assess the enterprise value and equity value of GS AgriFuels and its operations as of the date of the go private transaction (GS AgriFuels" operations are carried out through its wholly-owned NextGen Fuel, Inc. and Sustainable Systems, Inc. subsidiaries). In the event and to the extent that the per common share equity value of GS AgriFuels exceeds the $0.50 initially paid, then GS AgriFuels" minority shareholders of record as of the date of the go private transaction shall receive an additional cash sum equal to the difference between the appraised per share equity value and $0.50 per share.
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The Go Private Agreement also included terms that restructured GS AgriFuels" $21 million in convertible debt due to YA Global, which debt was previously in default. The parties agreed to restructure this debt to provide for (a) the conversion into private GS AgriFuels common stock at the lesser of $0.255 per common share or 80% of the per share equity value derived in the valuation report described above, (b) monthly and quarterly payments out of GS AgriFuels" net positive cash flows (after other regular debt service), (c) the repayment of $7.5 million in principal due to YA Global on or before July 1, 2008, and (d) the issuance to YA Global, after the merger, of 3,329,630 shares, or about 9%, of GS AgriFuels" issued and outstanding common stock and 1,665,000 warrants in GS AgriFuels, corresponding to an additional 4.5% of GS AgriFuels" issued and outstanding common stock.
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5.


Acceleration of Convertible Debt

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The following is a schedule of the outstanding convertible debt due to YA Global from GS CleanTech (prior to the GS EnviroServices redemption described above), GS CleanTech"s former parent company, GreenShift Corporation (OTC Bulletin Board: GSHF), and GS AgriFuels:
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Company


Amount


GS CleanTech Corporation (OTC Bulletin Board: GSCL)


$ Â 8,918,424


GS AgriFuels Corporation (OTC Bulletin Board: GSGF)


$ 20,179,631


GreenShift Corporation (OTC Bulletin Board: GSHF)


$ Â 1,982,869
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GS CleanTech, GreenShift, and GS CleanTech"s majority shareholder, Kevin Kreisler (who has personally guarantied all debt due to YA Global), have agreed to accelerate the repayment of a minimum of $13.5 million in convertible debt during 2008.
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Aside from the redemption of GS EnviroServices stock noted above, Management"s primary plan is to achieve this repayment using the Company"s current and expected net positive cash flows after regular debt service.

Impact of Restructuring

A summary of the impact of the above and all recently completed restructuring transactions is as follows:

New Name
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GS CleanTech is changing its name to GreenShift, which change is expected to become effective early in February 2008. Once its name change to GreenShift is effective, all of GS CleanTech"s technology-centric products and services will be sold under the GreenShift brand.
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Operations


GS CleanTech develops and supports clean technologies and companies that enhance resource utilization by targeting and leveraging co-product extraction, beneficiation and refining opportunities. GS CleanTech"s will continue to focus on sales and earnings growth through the deployment and commissioning of corn oil extraction systems, the sales of biodiesel equipment, the financing, construction and operation of co-located corn oil biodiesel production facilities, the expansion and operation of the Company"s oilseed crush plant, and the growth of the Company"s design and manufacturing group.
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Organizational Chart


After the short-form merger involving GS AgriFuels and the redemption by GS EnviroServices of GS CleanTech"s stake in GS EnviroServices, GS CleanTech"s operations will be administered through the following organizational structure:
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Subsidiary
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Operations
GS Ethanol Technologies, Inc. Â

Corn Oil Extraction & Process Engineering
GS AgriFuels Corporation

Oilseed Crushing & Biodiesel Production Equipment
GS Energy Corporation (OTCBB: GSEG) Manufacturing & Emerging Technology R&D
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Share Structure


GS CleanTech"s pro forma January 31,2008 share structure is provided here:
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Shares
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% of Total
Authorized Common Shares 500,000,000 --
Authorized Preferred Shares 1,000,000 --


Issued and Outstanding Preferred Shares


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0 0.00%


Issued and Outstanding Common Shares


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140,000,000 100.00%
Public Float 30,800,000 22.00%

Additional Information

Detailed additional information on each of these transactions will be filed with the Securities and Exchange Commission on a Form 8K by GS CleanTech and its publicly-held subsidiaries.

About GS CleanTech Corporation

GS CleanTech Corporation (OTC Bulletin Board: GSCL) develops and supports clean technologies and companies that facilitate the efficient use of natural resources. GS CleanTech"s ambition is to catalyze the rapid realization of disruptive environmental gains by creating valuable opportunities for a great many people and companies to use resources more efficiently and to be more profitable. GS CleanTech Corporation owns majority stakes in each of GS Ethanol Technologies, Inc., GS AgriFuels Corporation (OTC Bulletin Board: GSGF), GS Energy Corporation (OTC Bulletin Board: GSEG) and GS EnviroServices, Inc. (OTC Bulletin Board: GSEN). Additional information on GS CleanTech is available online at www.gs-cleantech.com and www.greenshift.com.

Safe Harbor Statement

This press release contains statements that may constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of GreenShift Corporation, GS CleanTech Corporation, GS AgriFuels Corporation, GS Energy Corporation and GS EnviroServices, Inc., and members of their management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-statements include fluctuation of operating results, the ability to compete successfully, and the ability to complete before-mentioned transactions. The company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.
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