MISCOR Group Enters Agreement to Sell American Motive Power
SOUTH BEND, Ind., March 16 /PRNewswire-FirstCall/ -- Industrial services provider MISCOR Group, Ltd. (OTC Bulletin Board: MIGL) today announced it has entered into an agreement for the sale of its wholly owned subsidiary, American Motive Power, Inc. (AMP), located in Dansville, N.Y. The purchaser is an affiliate of Dansville Properties, LLC, which leases the Dansville facility to AMP. The sale is part of MISCOR's previously announced restructuring plan, which is intended to refocus the Company's business strategy on the maintenance, repair, remanufacturing and manufacturing of mechanical and electrical equipment for customers in the industrial and utility industries.
Under the terms of the transaction, the purchaser has acquired all of the outstanding capital stock of AMP in exchange for $1.00, and MISCOR has obtained the release by Dansville Properties of the Company's guaranty of AMP's lease obligations. MISCOR has also obtained mutual releases with certain affiliates of Dansville Properties of all obligations arising under agreements executed on Jan. 16, 2008, by which MISCOR had purchased AMP.
"This transaction cuts our losses with American Motive Power," said John A. Martell, President and CEO of MISCOR Group. "Despite our confidence in the future of the business, we simply could not continue to fund operating losses and increasing liabilities, which have continued due to the slow rebound of the locomotive rebuilding business. Instead, we need to focus our energies and our capital on growth opportunities in our industrial and utility services businesses."
In 2009, MISCOR began the process of divesting certain businesses that did not align with its restructuring plan, and the Company announced the sale of its Montreal-based AMP operations in December 2009. "Unfortunately, our cost-cutting initiatives were not enough to combat overall market deterioration and return our rail services segment to operational efficiency. This divesture is another step in our restructuring, which is reducing our operating costs and focusing our efforts on MISCOR's core businesses."
South Bend, Ind.-based MISCOR Group, Ltd. (OTC Bulletin Board: MIGL) currently provides electrical and mechanical solutions to industrial, commercial and institutional customers through two segments: Industrial Services, consisting of the Company's maintenance and repair services to several industries, including electric motor and wind power, and repairing, manufacturing, and remanufacturing industrial lifting magnets for the steel and scrap industries; and Rail Services, consisting of the Company's manufacturing and rebuilding of power assemblies, engine parts, and other components related to large diesel engines.
This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as "anticipates," "believes," "estimates," "expects," "intends," "should," "could," "will," or variations of such words and similar expressions are intended to identify forward-looking statements. These forward-looking statements reflect the Company's views, expectations and beliefs at the time such statements were made with respect to such matters, and may cover such items as the Company's future plans, objectives, events, contract pricing and results such as revenues, expenses, income, earnings per share, capital expenditures, operating margins, financial position, expected results of operations and other financial items. There are a number of factors, many of which are beyond the Company's control, which could cause actual results and outcomes to differ materially from those described in the forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Risk Factors") that make the timing, extent, likelihood and degree of occurrence of these matters difficult to predict. Risk Factors include, among others: price of raw materials, ability to win and service competitively priced new contracts in sufficient amounts to operate and expand effectively, employee turnover, ability to compete in highly competitive, geographically diverse marketplaces, ability to complete planned divestitures and varying and sometimes volatile economic conditions. For further discussion of risks and uncertainties, individuals should refer to the Company's SEC filings. MISCOR Group, Ltd. undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release is issued. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement.
SOURCE MISCOR Group, Ltd.