Evergreen Energy says private placement to bridge capital needs until asset monetizations complete

By Jennifer Lanning Drey

Portland, Ore., March 27 - Evergreen Energy, Inc.'s $15 million private placement announced Thursday will help the company bridge its capital needs until it is able to carry out planned asset monetizations, Kevin Collins, chief executive officer of Evergreen, said during an investor conference call held Friday.

"I think this was a very prudent measure on our part. We wanted to maintain some flexibility, especially in a time of much uncertainty and just wanted to have some dry powder in case we need it in the coming months," Collins said.

The CEO also said Friday that Evergreen has decided to exit the coal business and will be looking to monetize its subsidiary Buckeye Industrial Mining through a sale or joint venture.

Collins said Evergreen expects to have a deal in place within the next 90 days but will only move forward if offered an acceptable price.

Evergreen is also looking at selling some of its Fort Union assets in Wyoming or the facility itself, he said.

As previously reported, Evergreen arranged a $15 million private placement of 10% senior convertible promissory notes due Dec. 20, 2009.

Energy technology focus

The decision to exit the coal business reflects Evergreen's belief that its future looks best as an energy-technology company. Accordingly, the company will instead fully focus on its K-Fuel and C-Lock technologies.

"With both government and industry moving toward technology-based solutions with our world energy challenges, we feel that the market is moving toward us," Collins said.

Evergreen is moving forward with opportunities in Asia for its K-Fuel technology, where it has entered into a 50-50 joint venture that will bring in license, maintenance and consulting fees, he said.

In addition, the company expects to sign a deal with a large state-owned enterprise sometime in the summer.

The C-Lock subsidiary continues to build on its relationships with IBM and Enterprise Information Management to drive its information software solution, GreenCert, forward in Eastern Europe, Asia and North America.

"We really feel that with everything we have going on, we have turned the corner. We do have a new company, and we are in the process of making things happen," Collins said.

Cash burn

Evergreen's current cash burn, net of cash flows from Buckeye, is typically between $1.0 million and $1.5 million per month, depending on the level of investment in infrastructure in C-Lock, Collins said in response to a question following his formal remarks.

However, if the monetization of Buckeye were to drag longer than the projected 90 days, Buckeye is expected to be able to cash flow the entire Evergreen infrastructure by roughly the middle of the second quarter, he said.

When completed, the monetization of Buckeye would provide a build up of cash to fund operations for some period of time for C-Lock and K-Fuel, Collins said.

"We've got ourselves in a position where we can get there, and we can make things happen, even in a very difficult time," he said.

Evergreen Energy, based in Denver, refines coal into a cleaner solid fuel. Its subsidiary C-Lock Technology, Inc. is an energy technology company.

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