Private investment firm H.I.G. Capital LLC has acquired an 80 percent ownership stake in recycler and composite profile manufacturer Advanced Environmental Recycling Technologies Inc., in exchange for restructuring AERT's debt.
The companies announced March 22 that H.I.G. of Miami is providing new debt and equity capital for AERT, a publicly traded company headquartered in Springdale.
AERT has fought through some really tough times over the last couple of years, especially in the face of less-than-favorable economic conditions, AERT Chairman Joe Brooks said in a news release.
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. As such, the company has been exploring and carefully evaluating all strategic options available for it and its shareholders, Brooks said.
H.I.G. is extinguishing all debt relating to AERT's 2007 and 2008 bonds that were owned by H.I.G., and which have been in default.
In return H.I.G. receives preferred equity in the firm, and debt securities.
H.I.G. also is investing an additional $5.5 million into AERT to meet outstanding obligations, pay down debt, fund transaction expenses, and extend the maturity of and reduce the interest rate on its current loan.
AERT makes ChoiceDek- and MoistureShield-brand decking, and has a polyethylene recycling plant in Watts, Okla.
Brooks said the recovering U.S. economy is having a positive effect on AERT's performance, and the company is working to develop the Watts plant's ability to produce recycled plastic that can be sold commercially.
The modifications necessary to produce third-party sales are under way, with completion planned before the end of the third quarter, he said.