Gas Turbine Efficiency restructures loan notes

1st Mar 2011 15:58

Gas Turbine Efficiency is restructuring its loan notes and asking shareholders to cancel its Aim quotation to enable it to reduce costs and consider whether it is appropriate to sell the business. GTE supplies equipment to clean industrial gas turbines in order to make them more efficient. The company made a substantial loss in 2010 thanks to high fixed costs and non-recurring expenses. Sales rose 4% to $38.7m in 2010, including a flat contribution of $5.5m from aviation which was subsequently sold. The loan notes will be cancelled, and including unpaid interest, will be swapped for up to 18.5m preference shares of $1 each. The conversion price is 9.66 cents, which will reduce by 0.805 cents every six months. The lowest conversion price will be 0.2p a share. The preference shares also have a premium of $1.61 on certain events. This restructuring enables GTE to retain the cash raised from the sale of the aviation engines-related business. After leaving Aim, GTE would be re-registered as a private limited company. Management will consider whether it would be best to sell the business. Sales of the continuing activities should be much higher this year and GTE could return to profitability by 2012.