Evergreen Energy can't get financing, considering bankruptcy filing

By Caroline Salls

Pittsburgh, Jan. 13 - Evergreen Energy Inc. is unable to obtain additional financing, and its current financial condition raises substantial doubt about its ability to continue operations, according to an 8-K filed with the Securities and Exchange Commission.

As a result, the company said it is considering its remaining strategic alternatives, including a bankruptcy filing.

According to the 8-K, China joint venture Evergreen-China Technology Co., Ltd. executed a coal upgrading factory project cooperation agreement on Dec. 22 with a Chinese coal mining company.

Evergreen Energy said the cooperation agreement requires it and its joint venture partners to raise, directly or through third parties, the estimated $40 million to $50 million required for the design and construction of a K-Fuel facility.

Evergreen Energy said it does not have the capital to invest in the facility, nor do other joint venture partners.

The company said one of the joint venture partners has indicated that a reputable party in China has been in discussions about investing some of the capital and serving as co-developer of the K-Fuel facility, but the identity of that party has not been disclosed. The company said no agreement has been reached at this time.

Evergreen Energy said the cooperation agreement does not provide for royalties or any license fee to be paid to the joint venture and does not provide cash flow to the company or its subsidiaries.

Neither the joint venture nor its partners will provide financing to Evergreen Energy, according to the release.

Under the joint venture agreement, either party may terminate the joint venture if, by Dec. 31, 2011, the joint venture has not executed a commercial agreement with a project owner as a sub-licensee of a K-Fuel plant within China.

Evergreen Energy said it does not believe the cooperation agreement constitutes the required commercial agreement.

The company said its work with its joint venture partners to extend the time period with which the joint venture can comply with commercial agreement requirements, to provide cash to the company and to address a few other issues of concern concluded on Wednesday and were unsuccessful.

Accordingly, Evergreen Energy said its board is evaluating whether it should terminate the joint venture agreement in order to preserve rights to the K-Fuel technology in China.

Evergreen Energy, based in Denver, refines coal into a cleaner solid fuel.

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