U.S. Energy Biogas emerges from Chapter 11

U.S. Energy Systems (NASDAQ: USEY) today announced that its waste-to-energy subsidiary U.S. Energy Biogas has reorganized and emerged from bankruptcy.

“USEB is a successful and very attractive business with excellent growth opportunities, and we are very pleased that it now has a financial structure that can support its growth and deliver value to USEY’s shareholders,” said Asher E. Fogel, Chairman of USEB and Chief Executive Officer of USEY.

“USEB generates gross profit margins in excess of 45 percent, and we believe the business has the opportunity to double its free cash flow over the next 4 years.”

Based in Avon, Connecticut, USEB owns and operates 23 biogas-to-energy projects in 10 states. In 2006, USEB sold 270,000,000 kwhs of electricity and 653,000 mmbtus of boiler fuel generated from 4,240,000 million BTUs of landfill gas.

USEB’s Chapter 11 reorganization included refinancing a loan agreement, "retirement" of approximately $65,000,000 of long term subsidy repayment obligations with a $5,250,000 payment to the Illinois Commerce Commission, and payment of supplier and creditor invoices.

When it filed for Chapter 11 protection last November, USEB said its business was operationally healthy with attractive growth opportunities, was current in its payment of all principal and interest, with no monetary defaults to any creditors.

“We also are very appreciative of the cooperation and support we received from our customers, business partners and creditors,” said Fogel. “We were able to honor our commitments to them on an expedited timeframe, and we are confident that USEB’s growth will be mutually rewarding.”

USEB's parent company USEY owns and operates energy projects in the United States and United Kingdom that generate electricity, thermal energy and gas production.

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