Broadwind Energy Approves Second Extension of Section 382 Rights Agreement
February 08 2019 - 7:00AM
Broadwind Energy, Inc. (NASDAQ: BWEN) announced today that its
Board of Directors has approved a second amendment to the Company’s
Section 382 Rights Agreement (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, 2022. The Rights Plan is similar
to plans adopted by other public companies with significant NOLs.
Broadwind’s 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, which can be used to
offset approximately $250 million of 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 2019 Annual Meeting of Stockholders.
The “Rights” (as defined in the Rights Plan) will expire on the
earliest of (i) the close of business on February 22, 2022, (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 2019 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
BWEN INVESTOR CONTACT: Jason Bonfigt:
708-780-4821 jason.bonfigt@bwen.com
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