Global Power Equipment files for Chapter 11

New York, Sept. 28 - Global Power Equipment Group Inc. filed for Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware Thursday.

The Tulsa, Okla., maker of gas turbine power plants and power-related equipment for industrial operations said the move is to allow it to "reorganize" its financial affairs and address the "ongoing cash drain" from the Heat Recovery Steam Generator business of its Deltak, LLC subsidiary.

All U.S. subsidiaries, including Deltak, Williams Industrial Services Group, LLC and Braden Manufacturing, LLC were included in the filing.

Global Power said it believes Williams and Braden are fundamentally sound.

Deltak has already notified employees of a substantial initial reduction in its workforce. The subsidiary will now begin an orderly wind down of its Heat Recovery Steam Generator business unless it is able to obtain material concessions from its customers regarding the terms on which it would complete its major ongoing projects.

Deltak's Specialty Boiler business will continue operations, subject to obtaining immediate accommodations from some customers.

"We have been actively exploring options to recapitalize our businesses for the last nine months," said Larry Edwards, the Global Power's president and chief executive officer, in a news release. "Ultimately, this effort led us to the difficult conclusion that Chapter 11 would provide the best opportunity to maximize value for all of our stakeholders."

Global Power said it has experienced "escalating losses" related to large scale Heat Recovery Steam Generator projects within Deltak.

In addition, Global Power has been unable to access its credit facility.

In its Chapter 11 filing, Global Power listed $381.131 million of assets and $123.221 million of liabilities.

The largest unsecured creditors are Steelhead Investments Ltd., managed by HBK Investments Ltd. of Dallas, and Kings Road Investments Ltd., managed by Polygon Investment Partners LLP of New York, both with $27.876 million claims for subordinated convertible debt. D.B. Zwirn Special Opportunities Fund, Ltd. and HCM/Z Special Opportunities LLC, both managed by D.B. Zwirn & Co., LP of New York, each have claims for $6.195 million of subordinated convertible debt. D.B. Zwirn Special Opportunities Fund, LP has a $3.097 million subordinated convertible debt claim.

All other claims over $1 million are trade claims, led by Aarding BV of Nunspeet, Holland, with $2.143 million, Tepak Teknik Sdn. Bhd. of Selangor Darul Ehsan, Malaysia, with $1.930 million and Coen Co. Inc./DE Jong Coen BV of Schiedam, Holland, with $1.607 million.

Stockholders owning more than 5% of the company's stock are: Harvest Associates III, LLC, Cannell Capital LLC, PPM America Private Equity Fund LP, Mac-Per-Wolf Co., Bobson Capital Management LLC, Lord, Abbett & Co. LLC, Barclays Global Investors, NA and Brandywine Asset Management, LLC.

Global Power intends to access over $20 million of cash on hand to fund its operations during the Chapter 11 proceeding.

The Chapter 11 case number is 06-11045.

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