SAVAGE, Minn. (Sept. 15, 2008) — Faced with the need to pay down its debts and satisfy its primary lender, GreenMan Technologies Inc. has signed an agreement to divest its Iowa and Minnesota tire recycling subsidiaries to Liberty Tire Services of Ohio L.L.C.
GreenMan expects to realize more than $26 million from the sale, which will be used to pay off a $13 million debt to its primary lender, Laurus Master Fund Ltd., and several million dollars in transaction-related costs, according to GreenMan CEO Lyle Jensen.
The company expects to have minimal long-term debt and more than $5 million in cash once the deal is completed, Jensen said.
The sale is subject to Securities and Exchange Commission approval and a vote of the shareholders, with the latter expected in late October, according to Jensen.
If the transaction goes through, GreenMan will be left with two subsidiaries: Des Moines, Iowa-based Welch Products Inc., which it acquired in 2007, and GreenMan Renewable Fuel and Alternative Energy Inc., whose formation was announced early in September.