AERT Restructures Debt

Advanced Environmental Recycling Technologies Inc. (AERT), a manufacturer of plastic/wood composite products, has announced that the company and an affiliate of the private equity firm H.I.G. Capital LLC have consummated a plan to restructure and reduce AERT’s existing debt, infuse new capital into the business and strengthen its balance sheet.

As part of the restructuring, H.I.G. assisted AERT, headquartered in Springdale, Ark., by extinguishing all debt relating to the company's 2007 and 2008 bonds owned by H.I.G. Capital, which have been in default. In return, H.I.G. Capital received preferred equity and debt securities, significantly reducing AERT’s outstanding debt obligations. Concurrent with this transaction, H.I.G. invested an additional $5.5 million into AERT to meet outstanding vendor obligations, further pay down debt, and fund transaction expenses and extended the maturity of and reduced the interest rate on its existing loan.

"As has been previously reported numerous times, AERT has fought through some really tough times over the last couple of years especially in the face of less than favorable economic conditions. Despite making strides in our business, the weak economy and other factors put significant financial stress on the company and created liquidity challenges which escalated throughout the fall and winter,” says Joe Brooks, AERT’s chairman. “As such, the company has been exploring and carefully evaluating all strategic options available for it and its shareholders. We are appreciative of the H.I.G. team's commitment to AERT and desire to partner with AERT to effectuate this transaction which we feel is a positive for the company and all of its stakeholders."