Raser Technologies bankrupt; secured creditors, noteholders OK terms

By Caroline Salls

Pittsburgh, April 29 - Raser Technologies, Inc. filed Chapter 11 bankruptcy Friday in the U.S. Bankruptcy Court for the District of Delaware to restructure its business and capital structure through a plan of reorganization support and restructuring agreement with its Thermo No. 1 project secured creditors and 8% convertible senior noteholders, according to a company news release.

Under the plan support agreement, Raser will restructure substantially all of its debt, including more than $90 million of secured and unsecured debt and over $5 million in trade obligations and other claims, and will receive an infusion of new capital to ensure that it will be in a position to continue its operations and execute its business plan.

"Throughout the reorganization process, we will be conducting business as usual and have taken every step possible to ensure that the Chapter 11 filings will not adversely affect our day-to-day operations or the delivery of power from the Thermo No. 1 plant," chairman and chief executive officer Nick Goodman said in the release.

"These steps include obtaining a committed $8.75 million debtor-in-possession financing facility from two of our bondholders.

"Reorganizing and recapitalizing the company is a critical step in positioning the company to obtain the capital we need to repower our Thermo No. 1 project, develop our resource portfolio and take advantage of growth opportunities in the geothermal energy market.

"Today's action will provide long-term relief from our debilitating legacy debt and allow us to pursue development of innovative geothermal and other renewable energy solutions.

"We are optimistic that the strong support we have received from our creditors will facilitate an accelerated pace for our reorganization and our exit from bankruptcy."

The company said the plan support agreement calls for resolution of substantially all existing secured and unsecured debt and elimination of all equity interests, including common stock, options and warrants.

The DIP financing will be used to fund Raser's working capital needs during the bankruptcy proceedings.

Details of the DIP loan had not been filed as of Friday evening.

Debt details

According to court documents, Raser had $41.84 million in assets and $107.78 million in debt as of Dec. 31.

The company's largest unsecured creditors include:

• Merrill Lynch of New York, with a $22.65 million unsecured promissory note claim;

• LindEn Advisor LP of New York, with a $21.37 million unsecured convertible note claim;

• Aristeia Capital of New York, with an unsecured convertible note claim in an undisclosed amount;

• Lazard Asset Management of New York, with a $5.75 million unsecured convertible note claim;

• Pratt & Whitney of East Hartford, Conn., with a $4.92 million equipment payment holdback maintenance contract claim;

• Tenor Capital Management Co. of New York, with a $4.68 million unsecured convertible note claim;

• Evergreen Clean Energy, LLC of Provo, Utah, with a $2.41 million unsecured promissory note claim; and

• Beaver County Treasurer of Beaver, Utah, with a $1.08 million property tax claim.

The company is represented by Hunton & Williams, LLP.

Provo, Utah-based Raser is a technology licensing and development company focused on geothermal power generation. The Chapter 11 case number is 11-11315.

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