Tire recycler GreenMan Technologies Inc. sold its wholly owned subsidiary in California to its former owner, Vern Mabry.
The sale became effective July 17. Terms of the transaction weren't disclosed.
GreenMan said the subsidiary, GreenMan Technologies of California Inc., was formed in 2002 to acquire all the outstanding common stock of Unlimited Tire Technologies Inc., an Azusa, Calif., scrap tire recycling company in which Mr. Mabry was majority owner.
``While we would have preferred to maintain a presence in the California tire recycling market, our California subsidiary's performance had not met expectations, and therefore we felt it was in the company's best interest to divest the subsidiary,'' said GreenMan CEO Lyle Jensen. ``We can now focus our efforts on maximizing performance of our core Midwestern operations in order to realize their full potential.''
Mr. Jensen added that the California divestiture is one step in the struggling company's five-step turnaround plan. Another step recently undertaken was a refinancing agreement with its primary lender, Laurus Master Fund Ltd., for a three-year, $16 million credit facility.
The credit facility includes all of GreenMan's subsidiaries and consists of a $5 million non-convertible secured revolving note, the proceeds of which are based on the companies' ``eligible collateral'' at the time of advance and an $11 million secured non-convertible term note.
GreenMan said it used approximately $10 million of the term note proceeds to repay existing debt-including approximately $8.5 million due to Laurus and $1.2 million due to GreenMan Technologies of Iowa Inc.'s primary lender-and to pay approximately $878,000 of transaction fees associated with the credit facility.
Also as part of its restructuring efforts, GreenMan moved its main offices to Savage from Lynnfield, Mass., in April and received approval from the OTC Bulletin Board to trade its stock there. In early June, the American Stock Exchange suspended GreenMan's listing and filed with the Securities and Exchange Commission to make the delisting official. The company did not maintain the required minimum stock value, AMEX said.