October 16, 2008 / 8:32 PM / in 9 years

EnGlobe to restructure, cut jobs; shares fall

OTTAWA, Oct 16 (Reuters) - EnGlobe Corp EG.TO shares tumbled sharply on Thursday after the Canadian environmental services company reported a big quarterly loss and said it was slashing jobs as part of a cost-cutting plan that will save C$10 million ($8.5 million) annually.

EnGlobe said late on Wednesday that it has cut 24 percent of its staff and is talking with bankers to revise its credit agreement and waive a breach of covenants until month’s end.

The Burlington, Ontario-based company also said it is talking with its largest shareholder, ONCAP Investment Partners, about providing “additional support”.

Toronto-based private equity fund ONCAP owns 24.6 million shares, or a 28.4 percent stake in the company, according to Reuters data.

EnGlobe said a poor performance at its organic waste management unit overshadowed solid quarterly results from its site remediation and technology divisions.

For the period ended June 30, EnGlobe said it lost C$22.5 million, or 26 Canadian cents a share, compared with a loss of C$178,000, or nil per share, in the same period last year.

The loss includes a C$9.6 million asset writedown and C$3.2 million non-cash tax asset writedown from the waste unit.

Revenue slipped 10 percent to C$38.2 million from C$42.5 million on lower waste volumes and tougher competition.

Shares dropped 27 percent to 13.5 Canadian cents per share on the Toronto Stock Exchange on Thursday. The stock has lost about 75 percent of its value in the last 12 months.

$1=$1.18 Canadian Reporting by Susan Taylor; Editing by Frank McGurty

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