Aert Restructures Debt, Adds Capital

Advanced Environmental Recycling Technologies, Inc. has reworked a credit deal that will reduce the company’s debt in exchange for preferred equity and debt securities.

Springdale-based AERT manufactures decking and outdoor products from recycled materials and also has a plastics recycling plant. Its decking products are sold through Lowe’s home improvement stores.

On Monday, AERT said it "consummated a balance sheet restructuring plan to restructure and reduce existing debt, infuse new capital into the business, and strengthen its balance sheet."

AERT reworked its financing with H.I.G. Capital, LLC, a longtime backer of the recycled products company. AERT was in default with its debt, which was not disclosed, to H.I.G.

In a press release, AERT said H.I.G. extinguished all debt related to two rounds of bond financing in 2007 and 2008. In return, H.I.G. Capital received preferred equity and debt securities. The move eliminates outstanding debt on AERT’s financials.

As part of the reworked deal, H.I.G. also invested an additional $5.5 million in AERT to "meet outstanding vendor obligations, further pay down debt, and fund transaction expenses and extended the maturity of and reduced the interest rate on its existing loan."

Joe Brooks, AERT’s company president, noted that AERT’s relationship with its vendor base and creditors has been strained in the past.

"As has been previously reported numerous times, AERT has fought through some really tough times over the last couple of years especially in the face of less than favorable economic conditions," said Brooks. "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."