CCS continues to work to monetize and initiate continuous operation of additional RC facilities, some of which are being delayed as several existing and potential RC investors are waiting for information from the IRS on clarification of the process for issuance of PLRs and potential recommended structures for tax-financing partnerships. ADA hoped that the IRS would provide this information before year-end, but it is now expected in early 2013.Today ADA-ES filed a Current Report on 8-K with the Securities and Exchange Commission (SEC) regarding amendments to the leases between CCS and an affiliate of Goldman Sachs (“Goldman”) for the two longest operating RC facilities. The original agreements signed in 2010 had an initial term of two and a half years with automatic one year extensions for the remaining seven years of Section 45 tax eligibility. Given the delay in the expected IRS information, CCS and Goldman have agreed to change the lease term to month-to-month. ADA expects that the amended leases will benefit the JV’s short-term cash flow as a significant portion of the lease payments will be made monthly rather than quarterly. Revenues under these leases will have a greater cash component as the $9 million in pre-paid rent paid in 2010 is now fully amortized. The Form 8-K also describes a deferment of the return of $4.7 million in deposits to an affiliate of Goldman until April 30, 2013. This provides more time for the affiliate to pursue leases on additional RC facilities owned by CCS for which they have indicated an interest in leasing up to a total of 18 to 20 million tons of RC per year.
ADA-ES Provides Year-End Update On Refined Coal Business
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