AIM-quoted Catalytic Solutions is merging with former AIM company Clean Diesel Technologies. Vehicle emission control systems supplier Catalytic’s AIM quotation will be cancelled and the post-merger shares of the combined business will be listed on NASDAQ.
Exact details are yet to be decided. NASDAQ-listed emissions reduction technology developer CDT will offer Catalytic shareholders enough shares to give it 60% of the enlarged group. The deal is conditional on both companies having at least $1 million in cash when the merger happens.
Catalytic plans to negotiate an additional capital injection of $4 million via an issue of convertible subordinated notes; $2 million needs to be issued before the merger can go ahead.
For every $167,000 shortfall in cash below $2 million, the Catalytic shareholders will receive 1% less of the enlarged company. For every $117,000 shortfall in cash below $4.5 million, CDT shareholders will receive 1% less of the enlarged company.
Catalytic has had cash problems for some time and its lenders have extended their loan facilities a number of times. In 2009, the company generated revenues of $50.5 million and made an operating loss of $8 million.
Clean Diesel generated revenues of $1.2 million over the same time period: however, its operating loss of $7.2m was of a similar size.
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