SOURCE: Catalytica Energy Systems, Inc.

September 06, 2007 16:05 ET

Catalytica Energy Systems Announces Date for Special Meeting to Vote on Proposed Merger Transaction

TEMPE, AZ--(Marketwire - September 6, 2007) - Catalytica Energy Systems, Inc. (NASDAQ: CESI) announced today that the definitive registration statement on Form S-4 containing the proxy statement / prospectus relating to its proposed business combination with the renewable energy divisions of NZ Legacy, LLC has been declared effective by the Securities and Exchange Commission (SEC). Catalytica Energy Systems plans to commence mailing of the definitive proxy statement / prospectus and related materials, including the Contribution and Merger Agreement, for stockholder consideration on or about Friday, September 7, 2007.

Stockholders of record of Catalytica Energy Systems as of the close of business on Friday, August 31, 2007 will be entitled to receive notice of and to vote at a Special Meeting of Stockholders scheduled for Thursday, September 27, 2007. The Meeting will take place at 10:00 a.m. local time at the principal executive offices of Catalytica Energy Systems located at 301 W. Warner Road, Suite 132, Tempe, Arizona 85284.

THE BOARD OF DIRECTORS OF CATALYTICA ENERGY SYSTEMS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ADOPTION OF THE CONTRIBUTION AND MERGER AGREEMENT. FAILING TO VOTE AT THE CATALYTICA SPECIAL MEETING, IN PERSON OR BY PROXY, WILL HAVE THE EFFECT OF A VOTE AGAINST THE ADOPTION OF THE CONTRIBUTION AND MERGER AGREEMENT.

Catalytica Energy Systems believes that completion of the transaction will provide an opportunity to increase shareholder value by:

--  Strategically broadening and diversifying the Company's product and
    service offerings to include the large and rapidly developing renewable
    energy market, which is estimated to exceed $225 billion worldwide by 2016;
--  Generating stronger, more predictable revenues and significantly
    improved cash flows through long-term power purchase agreements (PPAs)
--  Providing a significantly larger revenue and asset base to realize
    cost efficiencies; and
--  Strengthening and accelerating corporate growth through access to
    substantially larger markets.
    

If the merger proposal is adopted at the Special Meeting, the companies will seek to close the transaction promptly thereafter. Upon completion of the transaction, the companies will combine and operate under a new holding company named Renegy Holdings, Inc. (Renegy). Renegy will operate under two divisions focused on clean energy -- a division focused on becoming a leading independent power producer (IPP) of renewable energy in North America, and a division providing emissions compliance services for the coal-fired power generation industry. Under the first division, Renegy anticipates pursuing a rapid growth strategy through the creation of multiple renewable energy projects over a five-year period through acquisitions, construction, installation and operation. Renegy's first project will be a 24 megawatt (MW) biomass plant that is currently under construction near Snowflake, Arizona and scheduled to begin operating in the first half of 2008. The plant has two long-term PPAs in place with Arizona Public Services (APS) and Salt River Project (SRP), Arizona's two largest electric utilities. The PPAs provide that all of the power generated over a 20-year term is pre-sold, providing for a predictable future revenue stream subject to fuel availability. Other renewable energy project opportunities have been identified and are currently being explored. We expect that Renegy's portfolio of future renewable energy projects will include a mix of biomass, solar and wind power, with a focus primarily on biomass in the near-term. The second division will focus on growing its SCR catalyst and management services business (SCR-Tech), and continuing to explore strategic opportunities to broaden its reach in the growing market for clean coal technologies.

In addition to approval by the stockholders of Catalytica Energy Systems, the transaction is subject to regulatory approvals and customary closing conditions. In connection with the proposed transaction, Renegy submitted an application for inclusion of its common stock on NASDAQ and has reserved the ticker symbol RNGY for the trading of its common stock. If the contribution and merger agreement related to the proposed transaction is adopted by the stockholders of Catalytica Energy Systems, then upon the closing of the transaction, each share of Catalytica Energy Systems' common stock outstanding as of the effective time of the merger will be exchanged for one-seventh (1/7th) of a share of Renegy common stock. Stockholders of Catalytica Energy Systems will own approximately 41.5% of Renegy upon completion of the transaction, and a trust owned by Robert Worsley and his spouse (who also owns NZ Legacy) will own approximately 58.5% of Renegy, on a fully diluted basis using the treasury stock method.

Catalytica Energy Systems, based in Tempe, Arizona, provides innovative products and services to meet the growing demand for clean energy production, with a focus on cost-effective emissions control solutions for the coal-fired power generation industry. Through its SCR-Tech subsidiary (www.SCR-Tech.com), the Company offers a variety of services for coal-fired power plants that use selective catalytic reduction (SCR) systems to reduce nitrogen oxides (NOx) emissions. These services include SCR catalyst management, cleaning and regeneration, as well as consulting services to help power plant operators optimize efficiency and reduce overall NOx compliance costs. Find Catalytica Energy Systems on the Worldwide Web at www.CatalyticaEnergy.com.

Additional Information and Where to Find It

This document does not constitute an offer of any securities for sale. The proposed merger transaction described herein will be submitted to the stockholders of Catalytica Energy Systems, Inc. for their consideration. In connection with the proposed merger, Renegy Holdings, Inc. has filed a registration statement, a proxy statement / prospectus and other materials with the SEC. CATALYTICA ENERGY SYSTEMS URGES INVESTORS TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT / PROSPECTUS AND THESE OTHER MATERIALS CAREFULLY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT CATALYTICA ENERGY SYSTEMS, SNOWFLAKE WHITE MOUNTAIN POWER, RENEGY, RENEGY TRUCKING, AND THE PROPOSED TRANSACTION. Investors also may obtain information about the proposed transaction by reviewing the Form 8-K filed by Catalytica Energy Systems on May 8, 2007 in connection with the announcement of the transaction and any other documents filed with the SEC when they become available. Investors may obtain free copies of the proxy statement / prospectus as well as other filed documents containing information about Catalytica Energy Systems at http://www.sec.gov, the SEC's public website. These SEC filings may also be obtained free of charge on Catalytica Energy Systems' Web site at http://www.CatalyticaEnergy.com or by calling the Company's investor relations department at (650) 631-2847.

Participants in the Solicitation

Catalytica Energy Systems and its executive officers and directors may be deemed, under SEC rules, to be participants in the solicitation of proxies from stockholders of Catalytica Energy Systems with respect to the proposed merger. Information regarding the officers and directors of Catalytica Energy Systems is included in Amendment No. 1 to the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, filed with the SEC on April 30, 2007. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by securities holdings or otherwise, is set forth in the proxy statement / prospectus and other materials filed with the SEC in connection with the proposed merger.

This news release contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and is subject to the safe harbors created therein. These statements include, but are not limited to, those regarding the prospects and timing associated with consummation of the proposed merger; the anticipated dates associated with the mailing of definitive proxy materials and the Special Meeting of Stockholders; completion of construction and commissioning of the Snowflake biomass power plant and its ability to begin producing electrical power in the first half of 2008; the financial effects of the merger, including accretion to earnings and cash flows and the combined company's financial stability; the ability of the combined company to execute future power projects and market demand for renewable energy; the combined company's growth strategy and future opportunities; and our belief that the proposed transaction will provide the combined company with the opportunity to increase shareholder value by strategically broadening and diversifying the Company's product and service offerings, by generating stronger, more predictable revenues and significantly improved cash flows, by providing a significantly larger revenue and asset base to realize cost efficiencies, by enabling greater financial stability and long-term sustainability, and by strengthening and accelerating corporate growth through access to substantially larger markets. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those expressed in the forward-looking statements. These risks and uncertainties include, among others, the risk that we will not be able to close the transaction, delays in the completion and commissioning of the Snowflake biomass plant; diversion of management's attention away from other business concerns; the assumption of any undisclosed or other liabilities in connection with the transaction; the risks associated with the development, generally, of the combined company's overall strategic objectives; the ability of the combined company to build additional value in its business; the existence of unanticipated technical, commercial or other setbacks related to the combined company's products and services, including construction delays and the ability of the combined company to secure adequate fuel for the biomass plant; changes in the environmental requirements relating to certain emissions; and the other risks set forth in the Company's most recent Form 10-KSB and subsequent Forms 10-QSB and the Registration Statement on Form S-4 relating to the Transaction, filed with the Securities and Exchange Commission. Further, the Company expects to incur substantial transaction and merger related costs associated with completing the merger and combining the operations of the two companies. Expected benefits of the merger may not be achieved in the near term, or at all. The combined company will have a significant amount of debt as a result of the merger. This debt will require us to use cash flow to repay indebtedness, may have a material adverse effect on our financial health, and may limit our future operations and ability to borrow additional funds, including funds for new projects. In addition, a trust controlled by Bob Worsley will own a controlling interest in the Company and will be able to exert significant influence over the business of the Company. The Company undertakes no obligation to update any forward-looking statements to reflect new information, events, or circumstances occurring after the date of this release.

Contact Information

  • CONTACT:
    Megan Meloni
    Investor Relations
    (650) 631-2847