NEW YORK, Dec. 18, 2008 (GLOBE NEWSWIRE) -- MMC Energy, Inc. (Nasdaq:MMCE) announced today that it has received a proposal from Global Asset Capital to acquire the company. MMC said that its Board of Directors will evaluate this proposal carefully in the context of MMC's strategic plans and intends to pursue the best course of action to maximize long-term value for stockholders.
"Our Board is conducting a thoughtful and comprehensive process, and fully intends to conduct the process as planned in order to achieve a result that we believe will serve the best interests of our stockholders," said Michael Hamilton, MMC's Chief Executive Officer.
In March 2008, MMC announced it was working with its financial advisor to assist MMC with evaluating potential joint venture partnerships, strategic alliances, asset sales, or other strategic transactions that may serve to increase stockholder value. One week ago, on December 11, 2008, MMC announced that it had completed the sale for $15.3 million of its wholly owned subsidiary, MMC Escondido II, LLC, the only asset of which was an agreement to acquire a General Electric LM6000 PC Sprint(r) turbine.
In response to the press release made by GAC announcing its offer, Mr. Hamilton went on to state, "We are encouraged that GAC and others are showing interest in MMC and agree with their view that MMC's shares are trading below their intrinsic value. Our stockholders should rest assured that our Board has actively encouraged GAC and others in an effort to maximize stockholder value rather than failed to be responsive as was stated in GAC's letter."
MMC also stated that contrary to the statements in GAC's letter, MMC has made substantial progress in its permitting efforts. MMC has obtained all necessary permits for its Escondido upgrade and is nearing the end of a twenty-month effort before the California Energy Commission (CEC) to obtain the certification necessary to begin its Chula Vista upgrade, having received a favorable Final Staff Assessment from the CEC Staff in full support of the project. As disclosed in its public filings, MMC expects to receive these permits near the end of the first quarter of 2009. Any strategic transaction involving the Chula Vista site would require the transaction counterparty to make the same commitments to the CEC and Chula Vista on improving air quality as have been made by MMC. MMC has also been actively pursuing obtaining long-term off-take contracts for both projects, which can generally only be obtained through a request for offers (RFO) process run by San Diego Gas & Electric and other utilities that serve the area. MMC also disagreed with GAC's statement that MMC had a "cash burn" of $1 million per month and referred GAC to MMC's most recent 10-Q. Specifically, MMC noted that while there can be differences of opinion as to what constitutes "cash burn," MMC's G&A costs were running at approximately $500,000 per month, which was offset in part by cash generated from operations at the plant level averaging approximately $170,000 per month.
About MMC Energy, Inc.:
The Company acquires and actively manages electricity generating and energy infrastructure-related assets in the United States. The Company is traded on the NASDAQ Global Market in the United States.
The Company's mission is to acquire, directly or through joint ventures, a portfolio of small to mid-size natural gas fueled electricity generating assets, generally below 80 megawatts or "MW."
The Company creates long-term value for its shareholders through disciplined asset acquisitions and hands on post-acquisition asset management. The Company has invested in electricity assets which provide essential services to key transmission constrained markets in California, where regulatory capacity requirements and a lack of local electricity supplies make peak electricity generation facilities valuable.
To date, the Company has acquired three electricity generating assets in California, totaling 110 MW of capacity. The Company is poised to upgrade two of these assets, the 97 MW MMC Chula Vista Upgrade and the 48.5 MW MMC Escondido Upgrade, both located in San Diego County, California. When completed, the upgrades will add an incremental 89 MWs to this transmission constrained region.
Forward Looking Statements:
This press release contains 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 including anticipated events relating to completion of the Company's current upgrade projects. Although the forward-looking statements in this release reflect the good faith judgment of management, forward-looking statements are inherently subject to known and unknown risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements including, but not limited to, those risks described in the Company's Annual Report on Form 10-K, its most recent prospectus filed with the SEC on November 19, 2007 and in its other public filings. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company undertakes no obligation to update these forward-looking statements.