CTSU Catalytic (DI)

 

TIDMCTS TIDMCTSU TIDMJMAT 
 
RNS Number : 0267A 
Catalytic Solutions, Inc. 
01 October 2009 
 

+-------------------------------------+------------------------------------------+ 
| For immediate release               |                           1 October 2009 | 
+-------------------------------------+------------------------------------------+ 
 
 
 
 
Catalytic Solutions, Inc. 
 
 
(The "Company") 
 
 
SALE OF energy systems business 
 
 
Catalytic Solutions, Inc. (AIM:CTS and CTSU), the company behind Mixed Phase 
Catalyst (MPC ) technology ("Company"), today announces that it has sold the 
principal assets and liabilities of its energy systems business, Applied Utility 
Systems, Inc. ("AUS"), to Johnson Matthey (LSE:JMAT). 
 
 
Key terms of the transaction are as follows: 
 
 
  *  A total sale price of US$10 million with US$8.5 million having been paid in cash 
  at signing, US$0.5 million payable contingent upon AUS being awarded certain 
  projects and US$1.0 million retention against certain project and contract 
  warranties and other obligations. 
 
  *  Assets sold include contracts in progress, working capital, intellectual 
  property relating to systems, trade marks and trade names. A settlement will be 
  made between Johnson Matthey and the Company to reflect net working capital. 
 
The Company purchased AUS, a provider of cost-effective, engineered solutions 
for the clean and efficient utilization of fossil fuels, in 2006.  AUS provides 
emissions control and energy systems solutions for industrial and utility 
boilers, process heaters, gas turbines and generator sets used largely by major 
utilities, industrial process plants, OEMs, refineries, food processors, product 
manufacturers and universities.   This business accounted for a loss of 
US$915,000 for the year ended 31 December 2008, including certain non-recurring 
expenses of US$530,000 and depreciation and amortization expenses of US$556,000. 
 
 
Proceeds from the sale of AUS will enable the Company to pay down US$6.8 million 
of debt. Cycad Group LLC will be repaid the full US$3.3 million owed to them 
pursuant to a loan agreement with the Company and Fifth Third Bank will be 
repaid US$3.5 million of the approximately US$10.1 million owed to them pursuant 
to a loan agreement with the Company. 
 Following the transaction, Fifth Third Bank, as the Company's sole remaining 
secured lender, has agreed to extend forbearance on the remaining loan 
outstanding until 30 November 2009, subject to conditions typical for such 
forbearance. The Company previously announced on 30 June 2009 that it was in 
default under these two loan agreements and was negotiating with these lenders 
to extend forbearance in order to allow the Company to obtain funding. The 
Directors and management continue to pursue additional options to recapitalise 
the Company. Alternatives under consideration include the sale of Company stock 
and/or a sale of the Company's assets. 
 
 
Following this transaction, the Company expects to have sufficient working 
capital to operate until the forbearance from Fifth Third Bank ends on 30 
November 2009. 
 
 
At this time the Company cannot provide any assurances that it will be 
successful in its continuing efforts to recapitalize the balance sheet or in its 
work with the lender on loan modifications. In the event that the Company is not 
successful in the immediate future, there is substantial doubt that the Company 
will be able to continue operations without filing a petition of bankruptcy. 
There can be no assurances that in that event the Company would be able to 
reorganize through bankruptcy, and it might be forced to effect a liquidation of 
its assets. 
 
 
Commenting on the announcement, Charles F. Call, Chief Executive Officer of 
Catalytic Solutions, Inc. said: "We are pleased to complete this sale to Johnson 
Matthey. We believe that the energy systems business is on a firm foundation for 
future growth and will flourish under its new ownership. This transaction will 
give the Company more time in which to continue to pursue additional strategies 
to strengthen further the balance sheet and liquidity position." 
 
 
For further details, please contact: 
+--------------------------------+----------------------+-------------------------+ 
| Catalytic Solutions, Inc.      | Canaccord Adams      | Buchanan Communications | 
| Charlie Call, Chief Executive  | Robert Finlay        | Charles Ryland          | 
| Officer                        | Guy Blakeney         | Ben Willey              | 
| Tel: +1 (805) 639-9463         | Bhavesh Patel        | Christian Goodbody      | 
| Steve Golden, Chief Technical  | Tel: 020 7050 6500   | Tel: 020 7466 5000      | 
| Officer                        |                      |                         | 
| Tel: +1 (805) 639-9464         |                      |                         | 
| Nikhil Mehta, Chief Financial  |                      |                         | 
| Officer                        |                      |                         | 
| Tel: +1 (805) 639-9461         |                      |                         | 
+--------------------------------+----------------------+-------------------------+ 
 
 
About Catalytic Solutions, Inc. 
Catalytic Solutions, Inc. is a global manufacturer and distributor of emissions 
control systems and products, focused in the heavy-duty diesel and light-duty 
vehicle markets. The Company's emissions control systems and products are 
designed to deliver high value to our customers while benefiting the global 
environment through air quality improvement, sustainability and energy 
efficiency. Catalytic Solutions, Inc. is listed on AIM of the London Stock 
Exchange (AIM: CTS and CTSU) and currently has operations in the USA, Canada, 
France, Japan and Sweden as well as an Asian joint venture. The Company's 
website is www.catalyticsolutions.com. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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