Global Power Equipment Group Announces Agreement for Sale of China Boiler Unit
TULSA, Okla., Sept. 18 /PRNewswire-FirstCall/ -- Global Power Equipment Group Inc. (Pink Sheets: GEGQQ) ("Global Power") today announced that it has entered into an agreement with AE&E Group GmbH, a subsidiary of Austrian Energy & Environment AG, for the sale of Global Power's China boiler business unit, located in Nanjing, China. The sale of the China boiler business consists of Global Power Asia Limited ("GPAL"), a Hong Kong company, including GPAL's 90% ownership interest in Deltak Power Equipment (China) Co. Ltd. ("DPEC"). Upon completion of the transaction, Global Power expects to realize a pre-tax gain of approximately $10.2 million for financial reporting purposes. The transaction is subject to the approval of the United States Bankruptcy Court for the District of Delaware, which is presiding over the chapter 11 cases of Global Power and its domestic subsidiaries. The transaction is expected to close on or about October 10, 2007, after the satisfaction of certain additional conditions to closing.
John Matheson, President and Chief Executive Officer of Global Power, said, "We have valued our business relationship with our associates in Nanjing and wish AE&E great success. We also look forward to continuing and expanding our existing business relationships with our Shanghai company, Braden Power Equipment (Shanghai) Co. Ltd., and throughout China with our ongoing China business activities."
Acquired in the summer of 2004, DPEC primarily supported the large heat recovery steam generator ("HRSG") product line of Global Power as a manufacturing facility. The poor performance of the HRSG line was the primary factor behind Global Power's decision to commence chapter 11 proceedings in September 2006. Immediately prior to filing the chapter 11 proceedings, the company made the strategic decision to wind down its current large HRSG contracts and discontinue the operations related to large HRSG's. Shortly thereafter, Global Power classified DPEC as a non-core asset and began marketing the China boiler business unit for sale. Both GPAL and DPEC are non-debtor affiliates of Global Power and not part of the U.S. chapter 11 proceedings.
Global Power was advised in the transaction by Business Development Asia LLC.
About Global Power Equipment Group
Oklahoma based Global Power Equipment Group Inc. is a leading design, engineering and manufacturing firm providing a broad array of equipment and services to the global energy, power infrastructure and process industries. The Company designs, engineers and manufactures a comprehensive portfolio of equipment for gas turbine power plants and power-related equipment for industrial operations, and has over 40 years of power generation industry experience. The Company's equipment is installed in power plants and in industrial operations in more than 40 countries on six continents and believes, in its product lines, it has one of the largest installed bases of equipment for power generation in the world. In addition, the Company provides routine and specialty maintenance services to nuclear, coal-fired, fossil, and hydroelectric power plants and other industrial operations. Additional information about Global Power Equipment Group may be found at http://www.globalpower.com.
About Austrian Energy & Environment AG
Vienna headquartered Austrian Energy & Environment AG is one of the world's leading international suppliers of systems of thermal generation and environmental systems. The group's product portfolio comprises boilers and plants, gas cleaning systems, thermal waste treatment plants, turnkey biomass and industrial plants, coal gasification units and valves, and services ranging from engineering and modernization through to conversion and plant operation. The group employs over 3,000 people in Vienna and Graz (Austria), Zurich (Switzerland), Cologne and Nuremberg (Germany), Brno (Czech Republic), Paris (France), Bilbao and Madrid (Spain), Slavonski Brod (Croatia), Moscow (Russia), Norcross (USA), Shanghai (China), Chennai (India), Sao Paulo (Brazil) and Sydney (Australia). It is owned by A-TEC Industries AG.
For further information visit: http://www.aee-group.com.
About A-TEC Industries AG
Vienna listed and domiciled A-TEC Industries AG is an international industrial group with flourishing drive technology, plant construction, mechanical engineering and metal industry divisions. The group currently employs around 11,000 people in Australia, Austria, China, Croatia, the Czech Republic, France, Germany, India, Italy, Poland, Serbia, Singapore, Slovakia, Spain, Switzerland, the UK, and the USA. The combined revenue of the four divisions was about EUR 1.6 billion in 2006.
For further information visit www.a-tecindustries.com.
Statements contained in this release regarding the Company's or management's intentions, beliefs, expectations, or predictions for the future, including, but not limited to, those regarding anticipated operations and operating results, are forward-looking statements within the meaning of U.S. federal securities laws and are subject to a number of risks, assumptions and uncertainties that could cause the Company's actual results to differ materially from those projected, including, but not limited to, completion of the audit of the Company's restated financial statements and 2005 annual financial statements; completion of the Company's 2005 and 2006 financial statements; the ability of the Company to continue as a going concern; the ability of the Company to operate pursuant to the terms of any debtor-in-possession financing facility; the ability of the Company to obtain and maintain normal terms with vendors, suppliers and service providers; the Company's ability to maintain contracts that are critical to its operations; the potential adverse impact of the pending Chapter 11 cases filed by the Company and all of its U.S. subsidiaries on September 28, 2006 in the United States Bankruptcy Court for the District of Delaware (the "Chapter 11 cases") on the Company's ability to reorganize their financial affairs on the Company's liquidity or results of operations; the ability of the Company to fund and execute its business plan; the ability of the Company to attract, motivate and/ or retain key executives and managers and employees; the ability of the Company to attract and retain customers; the Company's ability to obtain court approval with respect to motions in the Chapter 11 cases prosecuted by it from time to time; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases; and the ability of the Company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 cases. Some of the other factors that could cause actual results to differ materially from those in, or implied by, the forward looking statements, include decreased demand for new gas turbine power plants; the loss of any of the Company's major customers; the cancellation of projects; project cost overruns, including increases in prices for energy or for materials such as steel, and unforeseen schedule delays; competition for the sale of the Company's products or services; poor performance by the Company's subcontractors; warranty and product liability claims; changes in the economic, social and political conditions in the countries in which the Company operates, including fluctuations in foreign currency exchange rates; and other factors set forth under "Risk Factors" in the Company's Form 10-K for the period ended December 31, 2004, and other reports on file with the U.S. Securities and Exchange Commission. The Company assumes no obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise.
Contact:
Michael Hanson
Chief Financial Officer
Global Power Equipment Group
918-488-0828
SOURCE Global Power Equipment Group Inc.
Released September 18, 2007