Capstone Green Energy Corp. said a U.S. federal court in Delaware confirmed a prepackaged Chapter 11 bankruptcy plan that paves the way for the company to reorganize on strong financial footing, the company said on Nov. 14.
Under the plan, Capstone business will emerge from bankruptcy within the next several weeks “with a substantially strengthened capital structure and improved liquidity, helping to ensure it is best equipped to continue to execute its strategy and further enhance its market leadership as a microgrid solutions and on-site energy technology systems provider,” according to the press release.
The company entered into bankruptcy in late September with $53 million and debt and interest payments of more than $3.9 million, which a company official said was “unsustainable,” according to court documents.
Capstone’s CEO resigned in August and at the time said that it might pursue selling the company. The company, by that point, had a market capitalization of about $10.66 million.
The Nov. 14 plan “contemplates” $7 million of new money exit financing, an increase from the original $5 million on exit.
“We are one step closer to achieving our goal of long-term financial stability,” said Robert Flexon, executive chairman and interim president and CEO. “Notably, the Plan provides that the company’s public stockholders will receive their pro rata share of one hundred percent (100%) of the equity in Capstone Green Energy Holdings, Inc., which will hold a majority interest in a new entity that will operate the company’s business, subject to dilution from equity incentive compensation pursuant to equity incentive plans.”
Flexon thanked investors, distributors, suppliers and employees for their support throughout the bankruptcy process.
“We are excited to continue building energy-saving and cost-efficient products for our customers,” he said, adding that Capstone would emerge better positioned to advance the company’s strategic priorities and continue to innovate and pursue new growth opportunities.
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