GreenShift reaches restructuring agreement

By | June 10, 2010
New release posted June 21, 2010

GreenShift Corp. today announced its execution of a series of agreements with YA Global Investments L.P. to reduce and restructure GreenShift's convertible debt to YA Global.

Joint Venture

The agreements call for the creation of a joint venture entity, YA Corn Oil Systems, LLC, into which GreenShift has agreed to transfer up to five GreenShift-owned corn oil extraction facilities based on GreenShift's patented and patent-pending technologies. In exchange, YA Global has agreed to reduce up to $11.7 million of the convertible debt issued by GreenShift to YA Global. GreenShift will also receive a 20 percent equity stake in the joint venture company and the right to receive 20 percent of the joint venture company's distributable cash upon the realization by the joint venture company of a 20 percent internal rate of return on its invested capital.

GreenShift further agreed to provide management services to the joint venture company for the ongoing operation and maintenance of the transferred extraction facilities in exchange for certain management and brokerage fees, as well as earnings-based performance bonuses to be paid in the form of up to another $6 million in reduction of GreenShift's convertible debt YA Global.

Impact of Transaction

If all of the contemplated transfers are completed, GreenShift's convertible debt due to YA Global will be reduced from about $42 million to about $30 million. This amount can be reduced further down to about $24 million upon realization by GreenShift of the performance bonuses noted above. In addition, the maturity date for the remaining convertible debt due from GreenShift to YA Global will be extended from March 31, 2011 to December 31, 2012.

"Reducing debt will lead to increased strength and enhanced capabilities to win new business," said Kevin Kreisler, GreenShift's chairman and chief executive officer. "The new agreements with YA Global provide a realistic mechanism to achieve this while we continue to service the needs of our clients."

"A key challenge and objective for us is to repay YA Global's investment in cost-effective ways while minimizing the issuance of common stock as much as possible. YA Global provided us with most of the funds we needed to develop and commercialize our patented and patent-pending technologies, and has been and remains a strong and flexible partner for our business, and we are pleased to have the opportunity to continue to partner with them in this new transaction as we achieve our goals to create value for our clients and shareholders. We look forward to satisfying the conditions for closing of the joint venture transaction and pressing forward," said Kreisler.

The transaction agreements have been escrowed with YA Global's counsel and will be held in trust pending satisfaction of certain conditions and will become effective only upon release from escrow. Additional information regarding the new agreements is available in GreenShift's Form 8K filed today, June 21, 2010.

Additional information on GreenShift and its technologies is available online at www.greenshift.com.

SOURCE: GREENSHIFT