DGAP-News: Clean Diesel Technologies, Inc. Takes Steps to Replace Subsidiary–s Secured Credit Facility and Provides Financing Update

Clean Diesel Technologies, Inc.

20.01.2011 22:01
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VENTURA, Calif., 2011-01-20 22:00 CET (GLOBE NEWSWIRE) –Clean Diesel Technologies, Inc. (Nasdaq:CDTI) (–Company–), a cleantech
emissions reduction company, announced today that its subsidiary, Catalytic
Solutions, Inc. (–CSI–), had entered into an agreement with Fifth Third Bank,
CSI–s secured lender under which Fifth Third Bank has agreed to extend
forbearance under the terms of its loan agreement with CSI. Clean Diesel also
announced that it subsequently entered into a commitment letter with another
financial institution for an alternative financing facility of up to $7.5
million. Proceeds from the alternative facility would be used in part to repay
all outstanding obligations under the existing Fifth Third Bank facility. As of
December 31, 2010, approximately $2.4 million was outstanding under the Fifth
Third Bank facility.

The agreement with Fifth Third Bank provided for an initial forbearance period
until February 14, 2011, with a further extension to March 14 if a satisfactory
commitment letter was delivered to Fifth Third Bank providing for financing
commitments in amounts sufficient to pay all outstanding obligations under the
loan agreement, provided that no default, forbearance default or event of
default (as defined in the credit and forbearance agreements) is outstanding.
Fifth Third Bank has advised CSI that the commitment letter for the alternative
financing facility is satisfactory for purposes of the further extended
forbearance agreement. During the forbearance period, the revolving credit
line will continue to have a credit limit of Canadian $6.0 million and bear
interest at US/Canadian Prime Rate plus 3.0 percent.

Charles F. Call, Chief Executive Officer of Clean Diesel, commented, –We
appreciate the confidence and support that our lender, Fifth Third Bank,
demonstrated by extending this agreement with us. We now can focus on
negotiating the documentation for the alternative financing facility. This new
facility would allow us to repay the Fifth Third Bank loan and continue the
progress we are making in restructuring CSI–s obligations following Clean
Diesel–s acquisition of CSI on October 15, 2010.–

A definitive agreement with respect to the new finance facility, as required by
the commitment letter, has not been executed and there can be no assurances
that such agreement will be executed or as to the terms of any such facility.

Additional financing update:

As previously reported, on December 30, 2010 Clean Diesel entered into an
agreement with Kanis S.A. pursuant to which Kanis S.A. loaned Clean Diesel US
$1.5 million. The proceeds of that loan were used, together with cash on hand,
to pay $1.6 million to retire in full the balance of CSI–s obligations of up to
$2.0 million under the settlement agreement with M.N. Mansour and M.N. Mansour,
Inc. that ended all outstanding litigation and arbitration claims and other
disputes between the parties relating to the agreements entered into in
connection with CSI–s 2006 purchase of Applied Utility Systems assets.

The Company also announced that since the completion of the merger with CSI on
October 15, 2010, holders of Clean Diesel warrants issued in connection with
the merger and the related Regulation S capital raise have exercised warrants
with respect to approximately 200,000 shares of Clean Diesel common stock,
resulting in cash proceeds to the Company of approximately $1.6 million.

About the Company

Clean Diesel Technologies, Inc. (Nasdaq:CDTI), –Clean Diesel,– –CDT– or the
–Company– is, as a result of the recent business combination with Catalytic
Solutions, Inc. (–CSI–), a vertically integrated global manufacturer and
distributor of emissions control systems and products, focused on the heavy
duty diesel (HDD) and light duty vehicle (LDV) markets. CDT utilizes its
proprietary patented Mixed Phase Catalyst (MPC(r)) technology, as well as its
ARIS(r) selective catalytic reduction; Platinum Plus(r) Fuel-Borne Catalyst (FBC),
and other technologies to provide high-value sustainable solutions to reduce
emissions, increase energy efficiency and lower the carbon intensity of on- and
off-road engine applications. CDT is headquartered in Ventura, California,
along with its wholly-owned subsidiary, CSI, and currently has operations in
the U.S., Canada, U.K., France, Japan and Sweden as well as an Asian joint
venture. For more information, please visit www.cdti.com and www.catsolns.com.

The Clean Diesel Technologies, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5742

Forward-Looking Statements Safe Harbor

Certain statements in this news release such as statements concerning progress
in restructuring CSI–s obligations constitute –forward-looking statements–
within the meaning of the Private Securities Litigation Reform Act of 1995
(including, without limitation, information regarding the Company–s opportunity
for combined revenue synergies and cost reductions). Such forward-looking
statements involve known or unknown risks, including those detailed in the
Company–s filings with the U.S. Securities and Exchange Commission,
uncertainties and other factors that may cause the actual results, performance
or achievements of the Company following the business combination with CSI to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date hereof. The Company assumes no obligation to update the
forward-looking information contained in this release.

CONTACT: Kristi Cushing, Investor Relations Manager
Tel: +1 (805) 639-9458
News Source: NASDAQ OMX

20.01.2011 Dissemination of a Corporate News, transmitted by DGAP –
a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

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Language: English
Company: Clean Diesel Technologies, Inc.

United States
Phone:
Fax:
E-mail:
Internet:
ISIN: US18449C3025
WKN:

End of Announcement DGAP News-Service

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