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05/08/2008 Clearford Industries Inc. Announces Material Progress on its Acquisition of an Ontario Based Precast Concrete Manufacturer and Further Announces Issues and Resolutions Regarding its Debt Structure Ottawa, Ontario – (May 8, 2008) - Clearford Industries Inc. (“Clearford”, TSX-V: CLI) announced today the signing of the share purchase agreement to acquire an Ontario based concrete manufacturer (the “Vendor”). As previously disclosed, Clearford has completed its due diligence pertaining to a conditional offer entered into between the parties on November 12, 2007 (the “Agreement”) whereby Clearford is to acquire all of the Vendor’s issued and outstanding shares. Clearford will now seek shareholder approval, debenture holder approval, as well as approval from HSBC Bank Canada. The effective date of the transaction has been set at June 30, 2008, so long as the August 14, 2008 target date for the completion of the acquisition is achieved. The name of the Vendor has been omitted at the request of the Vendor for competitive marketing and business reasons. Clearford will purchase all of the issued and outstanding shares of the Vendor, an Ontario corporation, for a total purchase price of approximately $22 million (the “Purchase Price”), subject to the provisions of the Agreement. The Purchase Price is to be paid by way of a $5 million secured promissory note and the remainder in cash at the time of closing. There are currently 25,706,165 Clearford common shares issued and outstanding, with an additional 31,250,000 shares issuable upon conversion of all outstanding convertible securities of Clearford and an additional 3,590,808 shares issuable upon vesting and exercise of outstanding stock options and warrants. The closing of the acquisition is subject to a number of conditions, including Clearford Board approval, consent of HSBC Bank Canada and the holders of the secured convertible debentures of Clearford, Exchange acceptance and potentially disinterested shareholder approval, and other customary conditions to closing as required in a transaction of this type. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. The above-mentioned transaction is a material acquisition by Clearford that could result in a change of control of Clearford and because of this may be treated as a reverse take-over transaction (an “RTO”) for the purposes of applicable securities laws and the policies of the TSX Venture Exchange (the “Exchange”). At this time, Clearford does not anticipate that the transaction will result in a change of control. The Vendor is an Ontario corporation with assets in one location in Ontario. The Vendor is a manufacturer of concrete products and has customers and distributors in Canada and the US. The addition of the Vendor’s business to Clearford’s Concrete Division builds on Clearford’s strategy of consolidation of the wet cast segment of the precast concrete market through acquisition. “Today marks a very significant milestone for the acquisition that was first announced in December 2007. As a result of the signing of the share purchase agreement, Management can work to finalize the financial terms of the transaction,” stated Bruce Linton, President and CEO of Clearford. “It is Management’s objective to deliver the shareholder circular with the complete transaction details including financing for shareholder review within the current fiscal quarter.” Clearford also announced today that, with the delivery of its first quarter results of 2008 to HSBC Bank of Canada (“HSBC”), it is in contravention of certain covenants of its facility letter agreement with HSBC (the “Facility Letter”), including the ratio of EBITDA to Interest Expense covenant, the ratio of Funded Debt to EBITDA covenant and the current ratio covenant. Clearford also announced today an agreement between HSBC and Clearford for the extension by HSBC to Clearford of a further credit facility of $1,000,000, extended to Clearford until May 20, 2008 (the “Extended Facility Terms”). Clearford is in further credit facility negotiations with HSBC. Clearford also announced today that HSBC and BNY Trust Company of Canada (the “Trustee”) and Clearford have entered into a Supplemental Agreement to Intercreditor Agreement (the “Supplemental Intercreditor Agreement”) wherein HSBC, the Trustee and Clearford agreed that, should a default exist under the HSBC Facility terms as at June 30, 2008, no payments will be made to the debenture holders, including the interest payment that is due and owing on June 30, 2008, and such payments will be postponed until September 30, 2008. The Trustee further agrees to not take any enforcement action or seek any remedies against Clearford with respect to the deferral of interest payment and certain debt covenants until September 30, 2008. All payments, including any due and not paid prior to September 30, 2008, are to resume again on September 30, 2008. Finally, Clearford announced today the execution of a Debenture Holders Extraordinary Resolution by holders of at least sixty percent of the value of the outstanding debentures of Clearford (the “Extraordinary Resolution”). The Extraordinary Resolution provides the debenture holders consent to Clearford entering into the Extended Facility Terms, authorizes the Trustee to enter into the Supplemental Intercreditor Agreement, and confirms that the debenture holders will take no default enforcement action under the Trust Indenture with respect to the deferral of interest payment and certain debt covenants prior to September 30, 2008. Certain information included in this press release is forward-looking and may involve risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors that might cause a difference include, but are not limited to, competitive developments, risks associated with Clearford’s growth, regulatory risks, intellectual property infringement and other factors. Unless otherwise required by applicable securities laws, Clearford disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. More detailed information about potential factors that could affect Clearford’s financial and business results is included in public documents Clearford files from time to time with Canadian securities regulatory authorities. Investors are cautioned that, except as disclosed in the management information circular and/or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transactions described herein may not be accurate or complete and should not be relied upon. Trading in the securities of Clearford should be considered highly speculative. Trading in the securities of Clearford has been halted by the TSX Venture Exchange since the date of the Initial Press Release and will continue to remain halted until: the terms of the required financing have been finalized and disclosed; and the name of the Vendor has been disclosed. The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
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