Broadwind Energy Approves Extension of Section 382 Rights Plan
February 05 2016 - 4:00PM
Broadwind Energy, Inc. (NASDAQ:BWEN) announced today that its Board
of Directors has approved an amendment to the Company’s Section 382
Rights Plan (the “Rights Plan”) designed to preserve Broadwind’s
substantial tax assets associated with net operating loss
carryforwards (“NOLs”) under Section 382 of the Internal Revenue
Code (“Section 382”). The amendment extends the Rights Plan through
February 22, 2019.
Broadwind interim CEO Stephanie Kushner stated, “The Rights Plan
was designed to serve the interests of all shareholders by helping
to protect Broadwind’s valuable tax assets of approximately $200
million that can be used to offset future taxable income.”
Pursuant to U.S. federal income tax rules, Broadwind’s use of
certain tax assets could be substantially limited if the Company
experiences an “ownership change” (as defined in Section 382). In
general, an ownership change occurs if the ownership of Broadwind’s
stock by “5 percent shareholders” increases by more than 50 percent
over the lowest percentage owned by such shareholders at any time
during the prior three years on a rolling basis. Broadwind intends
to submit the amendment to the Rights Plan for shareholder
ratification at its 2016 Annual Meeting of Stockholders.
In connection with the original implementation of the Rights
Plan, the Board declared a non-taxable dividend of one preferred
share purchase right (a “Right”) for each outstanding share of
Broadwind common stock to the Company’s shareholders of record as
of the close of business on February 22, 2013. Under the Rights
Plan, any person or group that acquires beneficial ownership of
4.9% or more of the Company’s common stock without Board approval
would be subject to significant dilution in the ownership interest
of that person or group. Shareholders who owned 4.9% or more of the
outstanding shares of Broadwind common stock as of the effective
date of the Rights Plan will not trigger the Rights unless they
acquire additional shares.
The Rights will expire on the earliest of (i) the close of
business on February 22, 2019 (unless that date is advanced or
extended by the Board), (ii) the time at which the Rights are
redeemed or exchanged under the Rights Plan, (iii) the repeal of
Section 382 or any successor statute and the Board’s
determination that the Rights Plan is no longer necessary for the
preservation of the Company’s NOLs, (iv) the beginning of a taxable
year of the Company to which the Board determines that no NOLs may
be carried forward, or (v) the failure to obtain shareholder
ratification of the amendment to the Rights Plan at Broadwind’s
2016 Annual Meeting of Stockholders.
Additional information regarding the amendment to the Rights
Plan will be contained in a Form 8-K and in an amendment to
Registration Statement on Form 8-A that Broadwind is filing with
the Securities and Exchange Commission.
About Broadwind Energy, Inc.Broadwind Energy
(NASDAQ:BWEN) applies decades of deep industrial expertise to
innovate integrated solutions for customers in the energy and
infrastructure markets. From gears and gearing systems for wind,
oil and gas and mining applications, to wind towers and industrial
weldments, we have solutions for the energy needs of the future.
With facilities throughout the central U.S., Broadwind Energy's
talented team is committed to helping customers maximize
performance of their investments—quicker, easier and smarter. Find
out more at www.bwen.com
Forward-Looking Statements
This release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 that
involve risks, uncertainties and assumptions, such as statements
regarding our third-quarter outlook, as well as assumptions made
by, and information currently available to, our management.
Forward-looking statements include any statement that does not
directly relate to a current or historical fact. We have tried to
identify forward-looking statements by using words such as
“anticipate,” “believe,” “expect,” “intend,” “will,” “should,”
“may,” “plan” and similar expressions, but these words are not the
exclusive means of identifying forward-looking statements. These
statements are based on current expectations, and we undertake no
obligation to update these statements to reflect events or
circumstances occurring after this release. Such statements are
subject to various risks and uncertainties that could cause actual
results to vary materially from those stated. Such risks and
uncertainties include, but are not limited to: expectations
regarding our business, end-markets, relationships with customers
and our ability to diversify our customer base; the impact of
competition and economic volatility on the industries in which we
compete, including, but not limited to, the oil and gas and mining
markets; our ability to realize revenue from customer orders and
backlog; the impact of regulation on our end-markets, including the
wind energy industry in particular; the sufficiency of our
liquidity and working capital and our plans to evaluate alternative
sources of funding if necessary; our ability to preserve and
utilize our tax net operating loss carry-forwards; our plans to
continue to grow our business through organic growth; our plans
with respect to the use of proceeds from financing activities and
our ability to operate our business efficiently, manage capital
expenditures and costs effectively, and generate cash flow; and
other risks and uncertainties described in our filings with the
Securities and Exchange Commission, including those contained in
Part I, Item 1A “Risk Factors” of our Annual Report on
Form 10-K for the year ended December 31, 2014.
BWEN INVESTOR CONTACT:
Joni Konstantelos, 708.780.4819
joni.konstantelos@bwen.com
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