Power Solutions International, Inc. (PSI), a leader in the design, engineer and manufacture of emissions-certified, alternative-fuel power systems, announced the closing of a share purchase agreement with Weichai America Corp. (Weichai America), a fully owned subsidiary company of Weichai Power Co., Ltd. (Weichai). Under the terms of the previously announced agreement, Weichai America is investing $60 million in PSI through a combination of newly issued common equity and preferred shares. The two companies also entered into a strategic collaboration agreement under which they will work together to accelerate market opportunities for each company's respective product lines across various geographic and end user segments.
Board Member Additions/Governance
PSI's board of directors has been increased to seven members with the appointment of Shaojun Sun and Jiang Kui, two individuals designated by Weichai America, as directors. Sun was also named chairman of the board of directors succeeding Gary Winemaster who has relinquished the role.
Sun, aged 51, is an executive director and executive president of Weichai Power Co., Ltd. He joined Weifang Diesel Engine Factory in 1988 and has held the positions of supervisor of the engineering department, the chief engineer of Weifang Diesel Engine Factory, and director of Torch Automobile Group Co., Ltd. Sun is currently a director of Weichai Group Holdings Limited and Weichai Heavy-Duty Machinery Co., Ltd. Sun is a researcher-grade senior engineer and holds a doctorate degree in engineering. He was appointed as Taishan Mountain scholar specialist by Shandong People's Government.
Kui, aged 53, was appointed as a non-executive director of Weichai Power Co., Ltd. on June 29, 2012. He has held various positions including engineer and deputy general manager of Assembly Department of Shandong Bulldozer General Factory, deputy general manager of Shantui Import and Export Company, deputy director, director of manufacturing department, deputy general manager and director of Shantui Engineering Machinery Co., Ltd., deputy general manager of Shandong Engineering Machinery Group Co., Ltd., executive deputy general manager and vice chairman of Weichai Group Holdings Limited, chairman of Shanzhong Jianji Co., Ltd. and director of Shandong Heavy Industry Group Co., Ltd. He is now the president of Shandong Heavy Industry Group Co., Ltd. He is a senior engineer and holds an MBA degree.
Strengthened Financial Position and Modified Capital Structure
The company used its $60 million of Weichai equity investment proceeds combined with borrowings on its amended $65 million asset-based revolving credit facility with Wells Fargo Bank, NA, to retire and satisfy a $60 million term loan with a lender. The fully committed $65 million credit facility with Wells Fargo Bank, NA, matures in March 2018 and as of March 31, 2017, approximately $17.6 million was drawn. Concurrent with the Weichai investment, PSI obtained the necessary amendments, consents and waivers from its lenders. Additionally, the company extended the maturity of its $55.0 million 6.50% Senior Notes to January 2019. Through this series of transactions PSI has significantly strengthened its financial condition through the addition of equity, reduction of debt and the extension of maturities, which has resulted in a stronger overall capital structure supporting growth expectations. To accomplish this, PSI realigned its lending group relationships and it is pleased with the support it received from current lending partners. The company looks forward to executing on its growth plan and believes that the new capital structure has appropriately positioned PSI for future success.