Update On Financial Position
December 21 2009 - 2:30AM
UK Regulatory
TIDMCTS TIDMCTSU
RNS Number : 4365E
Catalytic Solutions, Inc.
21 December 2009
+-------------------------------------+------------------------------------------+
| For Immediate Release | 21 December 2009 |
+-------------------------------------+------------------------------------------+
Catalytic Solutions, Inc.
(The "Company")
UPDATE ON FINANCIAL POSITION
RESTORATION TO TRADING
Catalytic Solutions, Inc. (AIM: CTS and CTSU), the Company behind Mixed Phase
Catalyst (MPC ) technology, announces the following:
* Sale of Intellectual Property to joint venture partner TKK for $4.0 million
* Agreement on terms of forbearance with secured lender
TKK transaction
The Board of Directors is pleased to announce that it has reached an agreement
with Tanaka Kikinzoku Kogyo Kabushiki Kaisha ("TKK"), its joint venture partner
in Asia Pacific, to sell the IP rights to part of its three-way catalyst ("TWC")
technology to TKK.
Under the terms of the Purchase & Sale Agreement (the "Agreement"), which has
been approved by the Boards of the Company and TKK, Catalytic Solutions will
sell certain patents relating to TWC technology to TKK for use in the Asia
Pacific region only. The Agreement accelerates the exercise of the acquisition
rights of TKK under the terms of the TC Catalyst Incorporated ("TCC") joint
venture and requires that the respective equity ownership of TKK and Catalytic
Solutions in the TCC joint venture changes to 95 per cent / 5 per cent in order
to reflect the change in contributor of the TWC technology to the joint venture.
The Agreement also provides Catalytic Solutions with a right of first refusal to
reacquire the patents in the event that TKK chooses to dispose of them. Under
the Agreement, the Company will receive total cash consideration of $4.0 million
which is expected to be received in two tranches in December 2009 and the first
quarter of 2010, respectively.
Catalytic Solutions will continue to own rights to the utilization of the TWC
technology in the remainder of the world, including the United States. In
addition, TKK has agreed that it will not compete with the joint venture that it
enjoys with the Company in the Asia Pacific region for the duration of the TCC
joint venture, which has a minimum duration of 10 years.
Forbearance agreement with Fifth Third Bank
Further to the Company's announcement of 27 November 2009, the Company and
Fifth Third Bank have agreed to the terms under which Fifth Third Bank will
extend forbearance until 31 January 2010 on the Company's outstanding debt
obligations owed to it. The key terms include the repayment of approximately
$900,000 to the bank by 31 December 2009, an increase in the interest rate
payable by 100 basis points beginning 1 December 2009 and an additional 50 basis
points beginning 1 January 2010. Other terms are customary for forbearance
agreements of this nature. In addition, the bank has renewed the revolving
facility through the term of forbearance. The facility was due for renewal on 31
December 2009.
The proceeds from the TKK transaction will be used in part to repay to Fifth
Third Bank those amounts agreed to under the terms of forbearance. In addition,
the proceeds will be used to fund the Company's operations while the Board seeks
a longer term solution to the Company's liquidity position through discussions
with other parties. While the board is working towards a successful conclusion
to these discussions, there can be no guarantee of success.
The Company's shares, which were suspended from trading on 30 September 2009,
will recommence trading with effect from 7:30a.m. on 21 December 2009.
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 | Kit Stephenson | 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 material set forth herein is for informational purposes only and is not
intended, and should not be construed, as an offer of securities for sale into
the United States or any other jurisdiction. The securities of the Company
described herein have not been registered under the U.S. Securities Act of 1933,
as Amended (the "Securities Act"), or the laws of any state, and may not be
offered or sold within the United States, except pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the
Securities Act and applicable state laws. There is no present intention to
register the Company's securities in the United States or to conduct a public
offering of securities in the United States.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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