ST. JOHN'S, NL, March 31 /CNW/ - Today Rutter Inc. (TSX: RUT) announced
that it has closed the sale of its controls and automation business to the
Rockwell Automation Group of Companies as previously announced on February 10,
2009. In conjunction with the sale, Rutter has also completed the
restructuring of its term loans.
Under the debt restructuring announced today, Rutter will immediately
reduce the principal amounts outstanding on the term loans to $21,400,000 from
$42,300,000. Outstanding subsequent to the close is a term loan of $8,000,000
at 10%, maturing August 2010. A second term loan of $13,400,000 at 12%,
maturing December 2012, includes repayments of $1,500,000 at August 31, 2009
and $1,900,000 at November 30, 2009 which will further reduce the second term
loan balance to $10,000,000. The amending agreement with Rutter's lender also
provides for additional payments to the lender, providing that the Company has
achieved certain current ratio targets, as well as monthly payments of
$100,000 commencing March 2010. Previous defaults under the lending agreement
have also been waived and new covenants established. As well, 4,000,000
warrants issued at $0.65 in June 2007 have been cancelled as part of the
restructuring. Under the new agreement the interest penalty charged if Rutter
is in default of its ratio covenants or payment obligations was increased from
2% to 4%.
In announcing the restructuring, David Beutel, Chairman of the Board,
commented that "in addition to reducing the debt using the proceeds of the
sale, we have also successfully reduced our interest costs from 14% and 18%,
including default interest, to 10% and 12% and addressed our covenant defaults
with our lender. By addressing our debt issue and creating a more focused
Company, the Board and I are confident that the Company is now better
positioned for the future and we look forward to focusing on our growing
technology, electronic and electronic subassembly manufacturing and consulting
engineering businesses as we move forward", he concluded.
About Rutter Inc. - Rutter is an enterprise focused on providing
innovative technologies and engineering solutions. Rutter's global network
supplies technologies to improve efficiency and safety in the marine, defense,
transportation, oil and gas sectors from its headquarters in the Province of
Newfoundland and Labrador. Multidisciplinary consulting engineering services
including civil, structural, mechanical and electrical engineering (other than
automation engineering) as well as environmental and construction management
services are provided to a diverse client base which includes all levels of
Government and the oil and gas and industrial sectors. For more information
see www.rutter.ca
Forward-Looking Statements
This news release may contain forward-looking statements that involve
risks and uncertainties. These forward-looking statements reflect our current
expectations and are subject to a number of risks and uncertainties including,
but not limited to, change in technology and general market conditions. Due to
the many risks and uncertainties, Rutter Inc. cannot assure that
forward-looking statements that may be contained in this news release will be
realized.
The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this news release.
%SEDAR: 00022015E
