K-Fuel and A New Plant:New Plant Will Be Constructed at .50 Cents Stock price Why Do You Care What the Company Does?Improving Evergreen's Financial Flexibility
by Evergreen Energy on Wed 01 Oct 2008 01:48 PM MDT | Permanent Link
By Kevin R. Collins
COLLINS STATEMENT is CLEAR PLANT in MID WEST WILL BE BUILT:
Take note Mid Western Plant planned:
He added that the Congressional extension will provide further impetus to Evergreen’s aggressive business development activities in the Midwestern United States, where the company foresees construction of a K-Fuel® plant near customers and at the intersection of multiple forms of rail, water and surface transportation.
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President & CEO
This morning we filed the last 8-K noting the conversion of an aggregate of 70% of our outstanding convertible notes into Evergreen common stock, and I want to expand on that filing.
Before we get into the background behind the filing, I want to emphasize that with all the talk out there about clean coal and cleaner coal, Evergreen stands ready to deliver a solution today with a proven process.
While our filings earlier today contained details about the transactions, we’ve received a number of questions that I can put into two categories:
? Why are we converting these securities now?
? What does this move do for Evergreen’s future?
The answers to both questions are rooted in a strategy to deleverage Evergreen’s balance sheet and improve our financial flexibility as we pursue definitive agreements to construct K-Fuel® production facilities – the most critical value-creation objective of our company.
We’ve talked previously about our progression on plant development activities, and beginning in the Spring of 2008 we began working on plans to improve our flexibility to finance these activities. Reducing our leverage has been near the top of that list – not only does reducing leverage add future financing flexibility, it also improves our P&L by lowering interest payment obligations.
While we would obviously prefer to reduce leverage in a manner that minimizes dilution risk for our shareholders, we also recognized that our convertible debt is secured by certain key assets that could give us added financial flexibility for business development purposes if they were released from that obligation.
One of those key assets is Buckeye Industrial Mining. As I noted in my August 18 letter to shareholders, we have been working to enhance the value of Buckeye. With increases in production and higher coal prices, we will see improving cash flow through the remainder of 2008 and, in addition, we will see significant increases in 2009. With certain capital expenditures and other improvements Buckeye is expected to exceed 1 million tons sold in 2009 followed by a potential 30 percent increase in 2010.
In any negotiation there is give and take, and the “give” for Evergreen here is the need to accept dilution in the immediate term to free the company from considerable restrictions that could impact execution of our primary business strategy: namely, the development of our first fully commercial K-Fuel® facility. We believe creating this financial flexibility for Evergreen at this time positions us to deliver shareholders a better deal when we announce our first plant agreement.
We appreciate the continued interest and questions from our investors, and I’ll assure all of you that today’s move is one more important step toward achieving our objective of constructing a K-Fuel® plant that delivers value to our shareholders and cleaner coal to a marketplace that needs it.
Posted to: Main Page
* Positive movement Collins out in Field this week to complete plans:
DENVER - October 3, 2008--The energy tax credits contained in the financial rescue package passed by Congress today include a one-year extension of the refined coal tax credit – an important incentive as well as endorsement of Evergreen Energy Inc.’s technology as a realistic, real-time component of U.S. energy policy.
That reaction was expressed today by Evergreen Energy President and CEO Kevin R. Collins, who said the tax credit will provide added incentives for potential K-Fuel® coal refinery customers to consider Evergreen’s patented pre-combustion technology that makes coal cleaner and more efficient.
“The extension of the refined coal tax credit is a key example of how government action can spur the commercial deployment of cleaner coal technologies which, along with alternative energy and conservation, will play a key role in meeting demand and attaining better energy security in the United States,” said Collins.
He added that the Congressional extension will provide further impetus to Evergreen’s aggressive business development activities in the Midwestern United States, where the company foresees construction of a K-Fuel® plant near customers and at the intersection of multiple forms of rail, water and surface transportation.
Numerous key members of Congress have vowed to pursue a longer term extension for refined coal together with wind and other renewable energy tax credits when the new Congress arrives in Washington next year.
Similar to the tax credit incentives for wind and other renewables, a production credit is provided to qualified refined coal facilities under Section 45 of the tax code that are placed in service no later than December 31, 2009. In addition to extending the deadline to December of next year so that the credit does not lapse at the end of 2008, the legislation passed today sets the credit at $5.877 per ton of qualified fuel. To qualify, the refined coal must achieve a 20-percent emissions reduction of nitrogen oxide and a 40 percent emissions reduction in either sulfur dioxide or mercury. The credit applies to actual production and is good for 10 years after the project is placed in service.
About Evergreen
Evergreen Energy Inc. refines coal into a cleaner, more efficient and affordable solid fuel that is available today to meet the growing energy demands of industrial and utility customers while addressing important environmental concerns. Visit
www.evgenergy.com for more information.
Contacts:
Analysts and Investors:
Jimmac Lofton
VP Corporate Development and Investor Relations
303-293-2992
jlofton@evgenergy.com
Media and Public Affairs:
Paul Jacobson
VP Corporate Communications
303-293-2992
pjacobson@evgenergy.com
Statements in this letter that relate to future plans or projected results of Evergreen Energy Inc. are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended by the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), and Section 21E of the Securities Exchange Act of 1934, as amended by the PSLRA, and all such statements fall under the "safe harbor" provisions of the PSLRA. Our actual results may vary materially from those described in any "forward-looking statement" due to, among other possible reasons, the realization of any one or more of the risk factors described in our annual or quarterly reports, or in any of our other filings with the Securities and Exchange Commission, all of which filings any reader of this letter is encouraged to study. Readers of this letter are cautioned not to put undue reliance on forward-looking statements.
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