newsUpdate on Railpower's CCAA Restructuring Process
4/3/2009 10:47 AM - Canada NewsWire
BROSSARD, QC, Apr 3, 2009 (Canada NewsWire via COMTEX News Network) --
TSX Symbol: P
Railpower Technologies Corp. (TSX: P) provided today an update as to the current status of its efforts to develop a comprehensive business restructuring plan for consideration by its creditors.
Since Railpower obtained court protection under the Companies' Creditors Arrangement Act (Canada) ("CCAA") on February 4, 2009, it has actively taken steps, with the assistance of its financial and legal advisors, to review all available strategic alternatives with respect to its restructuring plan, including seeking prospective purchasers and investors. As part of such process, Railpower has received certain expressions of interest from prospective transaction partners, none of which is likely to enhance recoveries for the creditors beyond liquidation value.
In light of the foregoing, Railpower continues to consider alternatives, which could include liquidation procedures. It is not anticipated that any such liquidation procedures will generate any value for shareholders.
The latest order issued by the Quebec Superior Court provided Railpower with protection under the CCAA until April 7, 2009. During such period, creditors and other third parties are stayed from taking action against Railpower. Railpower is considering whether to seek an extension of the stay of proceedings.
Even if any such extension is obtained, Railpower intends to allow the Toronto Stock Exchange ("TSX") to enforce any rights it may have as part of its review of the eligibility for continued listing on the TSX of Railpower's securities pursuant to its previously initiated expedited review process, which will likely lead to the delisting of Railpower's securities on the TSX.
While under CCAA protection, Railpower's board of directors maintains its usual role and its management remains responsible for the day-to-day operations of Railpower, under the supervision of the court-appointed monitor, Ernst & Young Inc.
About Railpower
Railpower (TSX: P), (www.railpower.com) is engaged in the development, construction, marketing and sales of high performance, clean locomotives and power plants for the transportation and related industries. Railpower has designed and is marketing a range of locomotives for the North American low and medium horsepower locomotive market. It has also designed and is marketing hybrid power plants for rubber tyred gantry cranes (Eco-Cranes(R)). Its technologies have broader potential and