Global Thermoelectric hopes market warms to its shares
Tue 19 Nov 2002
News Release
Mr. Mark Kryzan reports
GLOBAL THERMOELECTRIC INC. ANNOUNCES INITIATIVES TO MAXIMIZE ...
Global Thermoelectric has unveiled a three-point plan to maximize
shareholder value. The board of directors of Global believes that the
current trading price of Global common shares does not reflect either the
intrinsic value of its solid-oxide fuel-cell technology or its current
internal financial resources.
The company has expended $60-million since 1997 on its SOFC technology and,
in the company's opinion, has become the world leader in planar SOFC
technology. It has assembled a team of world-renowned experts in fuel cells
and has consistently demonstrated leading technical achievements,
including:
cell membrane power densities that the company believes exceed most, if not
all, other demonstrations using planar SOFC commercial-size membranes;
cell membrane operating life that approaches near-commercial performance
specifications;
fuel-cell stack reliability and operating life which also approach
near-commercial standards for initial niche-market applications; and
prototype testing that has demonstrated cell, stack and balance-of-plant
achievements in a system environment operating on natural gas. Currently,
the company is testing six prototypes at its Calgary facilities.
The company believes that significant additional expenditures on research
and development activities and capital equipment will be required in order
to establish a commercially viable fuel-cell business. Furthermore, the
company believes that to attain fuel-cell commercial viability, additional
markets must be targeted which operate with higher power output ranges than
those currently addressed by the company.
As of Sept. 30, 2002, the company had approximately $101-million of cash
and short-term investments on hand, which approximated $3.42 per share
(basic) and had $208,000 of long-term debt.
The company's thermoelectric generator division is experiencing significant
year-over-year growth with a 28-per-cent increase in revenues in the
nine-month period ended Sept. 30, 2002, and a 133-per-cent increase in
pretax profitability determined on a segmented basis.
As part of its three-point plan, the company has retained Salomon Smith
Barney for the purposes of reviewing strategic alternatives to maximize
shareholder value. These alternatives may include the sale of the company's
SOFC division, strategic partnering to strengthen the company's ability to
commercialize its technology or other initiatives consistent with the goal
of maximizing shareholder value.
Secondly, the company has initiated cost-reduction programs to reduce all
expenditures not directly related to core technology development. Excluding
its generator division and core fuel-cell development departments, the
company will immediately reduce its staffing levels by 30 per cent.
Thirdly, the board has approved the filing of a notice of intention to make
a normal course issuer bid with the Toronto Stock Exchange, for the
purchase, subject to regulatory approval, of up to 1.45 million common
shares representing five per cent of its issued and outstanding common
shares at Nov. 19, 2002.
The company will communicate further material developments related to this
plan if and when they arise. |
