GreenMan Divests Tennessee Scrap Tire Business; Tennessee Plant To Be Closed By September 30, 2005; Divestiture Will Positively
13 September 2005 - 11:00PM
Business Wire
GreenMan Technologies, Inc. (AMEX: GRN), a leading recycler of over
30 million scrap tires per year in the United States, today
announced that it has entered into an Asset Purchase Agreement with
Tennessee Tire Recyclers Inc. under which all Tennessee contracts
and certain other contracts with suppliers of waste tires and
contracts to supply whole tires to certain cement kilns in the
southeastern region of the United States have been assigned to
Tennessee Tire Recyclers. GreenMan received no cash consideration
for these assignments and expects to record a non-cash loss on the
transaction of approximately $918,000 associated with the write-off
of goodwill relating the intangible assets assigned. Bob Davis,
GreenMan's President and Chief Executive Officer said, "We estimate
the assumption of these contracts by Tennessee Tire Recyclers and
the pending closure of our Tennessee facility in September will
relieve us of obligations that have negatively contributed to our
operating losses over the past several years and will positively
impact our overall corporate cash flow by over $150,000 per month.
We anticipate the transition of assigning all contracts to be
completed within 90 days and will redeploy all remaining Tennessee
equipment to other locations during that timeframe." Mr. Davis
added, "Our efforts to reduce our operating costs, negotiate more
favorable terms with our existing secured creditors, refinance
existing long term debt and secure additional financing are
ongoing. We are committed to making the tough but necessary
decisions to ensure the future viability of GreenMan and continue
to evaluate all viable alternatives to achieve this objective with
our primary focus on our Southeastern operations". GreenMan was
founded in 1992 and today is comprised of six operating locations
that collect, process and market scrap over 30 million scrap tires
in whole, shredded or granular form. We are headquartered in
Lynnfield, Massachusetts and currently operate tire processing
operations in California, Georgia, Iowa and Minnesota. "Safe
Harbor" Statement: Under the Private Securities Litigation Reform
Act With the exception of the historical information contained in
this news release, the matters described herein contain
'forward-looking' statements that involve risk and uncertainties
that may individually or collectively impact the matters herein
described, including but not limited to the possibility that we may
not realize the benefits expected from our new Tennessee operation,
product acceptance, economic, competitive, governmental, seasonal,
management, technological and/or other factors outside the control
of the Company, which are detailed from time to time in the
Company's SEC reports, including the quarterly report on Form
10-QSB for the fiscal period ended June 30, 2005. The Company
disclaims any intent or obligation to update these
"forward-looking" statements.
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