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Silver Point to acquire U.S. Energy subsidiary in bid to aid financially troubled company
By Lisa Kerner
Charlotte, N.C., Aug. 6 - Silver Point Finance, LLC will acquire 100% of the common stock of U.S. Energy Systems, Inc. subsidiary U.S. Energy Biogas Corp. for $9.0 million, according to a form 8-K filing with the Securities and Exchange Commission.
In addition, Silver Point's letter of intent allows for an increase in the amount available under the credit and guaranty agreement of $8.0 million.
Silver Point's letter of intent expects the transaction to close by Oct. 31 and provides for a payment of $3.5 million by U.S. Energy if it or its affiliates enter into an acquisition arrangement with another third party.
Previously, Silver Point arranged for U.S. Energy to borrow some $23.3 million to acquire its U.K. assets. U.S. Energy issued warrants to Silver Point for 5.5 million shares of its stock until February 2014. Silver Point also entered into a credit and guaranty agreement in May with U.S. Energy for borrowings up to $80.0 million related to the company's emergence from bankruptcy.
On July 20, U.S. Energy announced it was working with Jefferies & Co., Inc. to evaluate existing financing as well as other available strategic alternatives.
At the time, the company expected to run out of cash as early as August, faced foreclosure of its assets and failed to make capital contributions required under its U.K. financing arrangements. Grant Emms, the company's chief executive officer and a director of its subsidiary UK Energy Systems Ltd., had been suspended with pay pending an investigation by the audit committee.
U.S. Energy Systems is a New York-based owner of green power and clean energy and resources.
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