Capstone Green Energy on Thursday said it has entered into a transaction support agreement (TSA) with Goldman Sachs (NYSE:GS) Speciality Lending Group and Broad Street Credit Holdings to support it through its restructuring efforts, which included filing for voluntary Chapter 11 bankruptcy protection.
The news sent shares of the energy company tumbling, trading down 26.1% at US$0.44 in the early afternoon on Thursday.
The goals of the restructuring are to reduce Capstone’s debt burden and improve liquidity. To fund the company through its restructuring, it said it has secured $12 million from its affiliates in addition to $3 million in new financing provided on September 22, 2023.
Post-restructuring, the company will become a private company retaining all of its assets, and its subsidiary Capstone Turbine Corporation (NASDAQ:CPST) will be renamed Capstone Green Energy Corporation and is expected to be its successor for the purposes of Securities and Exchange Commission (SEC) reporting and certain business, assets, and liabilities through its ownership interest in a new operating subsidiary.
The company said it expects to operate as normal throughout the Chapter 11 process.
"The new financings provide much-needed liquidity to ensure near-term stable operations and, importantly, upon emergence, our pre-petition debt and accrued interest of more than $56 million will decrease to $25 million resulting in significantly improved financial health and longer-term financial stability,” said Capstone CEO Robert Flexon.
He added: “Notably, the restructuring will provide that the company's public stockholders receive their pro rata share of equity in the new public company.”
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