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AERT Restructuring Debt & Gaining Capital
6 years, 4 months ago Posted in: Industry News 0

AERT Restructuring Trades Debt for Equity, Secures $5.5M Investment

Firm continues to operate in the red

Source: PROSALES Information Service Publication date: March 22, 2011

moistureshield_picAdvanced Environmental Recycling Technologies Inc. announced Monday it had restructured itself through a deal in which an affiliate of H.I.G. Capital LLC took preferred equity and debt securities in the Arkansas-based building materials make in exchange for extinguishing AERT debts to H.I.G. that had been in default for at least three years and by investing another $5.5 million into the company.

“AERT has fought through some really tough times over the last couple of years, especially in the face of less than favorable economic conditions,” AERT chairman Joe G. Brooks said in a statement. “Despite making strides in our business, the weak economy and other factors put significant financial stress on the company and created liquidity challenges which escalated throughout the fall and winter. As such, the company has been exploring and carefully evaluating all strategic options available for it and its shareholders.”

In February, AERT posted in an SEC filing a net loss of $2.1 million in the quarter ended Sept. 30, roughly half its loss in the year-earlier quarter. This came even though sales shrank to $16.2 million from $19.1 million. Through the first nine months of 2010, its net loss stood at $1.2 million, an improvement from its $4.4 million loss for January through September 2009. Here as well, sales shrank, to $55.8 million in the first three quarters of 2010 from $57.8 million in the year-earlier period.

The in-default bonds that AERT owed to H.I.G. date to 2007 and 2008. The AERT news release didn’t provide a value or volume of the debt securities that H.I.G. got from AERT, but did say they significantly reduced AERT’s outstanding debt obligations. As for the $5.5 million in additional investment, that moneyh will be used “to meet outstanding vendor obligations, further pay down debt, and fund transaction expenses and extended the maturity of and reduced the interest rate on its existing loan,” AERT said.

AERT’s product line includes the ChoiceDek brand, which is sold at Lowe’s, as well as the MoistureShield brand.

About Advanced Environmental Recycling Technologies (A.E.R.T.):
Advanced Environmental Recycling Technologies, Inc., (A.E.R.T.) is a microcap entrepreneurial publicly held manufacturing company that is currently traded on the OTCBB as AERT. The development of new technologies and patents has enabled it to produce superior new products from recycled wood fiber and recycled polyethylene plastic for the building and construction markets. Operating six facilities with more than 400 employees throughout the U.S., A.E.R.T. is the exclusive manufacturer of MoistureShield® composite decking and MoistureShield® trim and moulding.

 

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