Bombardier orders battery chargers from cash-strapped Turbo Power

By The Canadian Press

CALGARY - Cash-short Turbo Power Systems Inc (TSX: TPS.TO), a U.K.-based company that lists its shares in Canada, has received a new contract order from Bombardier Inc. (TSX: BBD-B.TO) for the supply of battery chargers for the Bombardier Turbostar trains.

At the same time, Turbo Power also announced that it is taking steps to deal with a shortage of available cash that resulted after its second-quarter results put the company in default of some of its debt covenants.

"Q2 results have continued to be impacted by delays in transitioning a number of programmes from development into production, which is expected to commence in the second half of the year," chief executive Paul Summers said in one of several announcements by the company made early Friday.

Turbo Power said its lenders have decided to withhold 1.5 million British pounds, about half of what had been made available under a financing announced in June.

Turbo Power is based in the United Kingdom and lists its shares on London's Alternative Investment Market as well as the Toronto Stock Exchange.

Turbo Power is proposing amendments to its loan note agreement that will be subject to shareholder approval at a special shareholders meeting Friday in Calgary.

About one-quarter of Turbo Power's shares are owned by two British investment firms. Impax Asset Management Ltd. owns 14.35 per cent of Turbo Power's shares and Gartmore Investment owns 11.85 per cent as well as some of the loan notes that are in default.

Turbo Power said the Bombardier order is worth about 600,000 pounds.