AMG affiliate Timminco announces closing of joint venture with Dow Corning and provides update on credit facilities
(Thomson Reuters ONE) -
Amsterdam, 1 October 2010 --- AMG Advanced Metallurgical Group N.V.'s ("AMG",
EURONEXT AMSTERDAM: "AMG") publicly listed affiliate, Timminco Limited
("Timminco") (TSX:TIM) announced today that it has completed its previously
announced joint venture transaction with Dow Corning Corporation ("Dow Corning")
regarding the silicon metal production facilities of Timminco's wholly-owned
subsidiary, Becancour Silicon Inc. ("Becancour Silicon").
As a result of today's closing, Dow Corning has acquired a 49% equity interest
in Quebec Silicon Limited Partnership ("Quebec Silicon"), the new joint venture
entity that owns the silicon metal operations in Becancour, Quebec, in
consideration for net cash proceeds of approximately $40.3 million. Becancour
Silicon could receive earn-out payments of up to potentially an additional $10.0
million, subject to achieving certain performance objectives relating to
production cost and capacity improvements within three years after the closing.
Becancour Silicon has retained a 51% equity stake in Quebec Silicon, as well as
all of the solar grade silicon purification operations and facilities at the
Becancour site. The majority of Becancour Silicon's senior management team, led
by Mr. Rene Boisvert who becomes President and Chief Executive Officer of Quebec
Silicon, will continue to manage the day-to-day silicon metal manufacturing
operations of Quebec Silicon going forward.
Timminco and Becancour Silicon (collectively, the "Company") will use the net
cash proceeds from the joint venture transaction to repay fully all outstanding
amounts due under the existing revolving credit facility and term loan with Bank
of America of approximately $27.7 million. The balance of the net cash proceeds
will be used for the Company's general corporate purposes.
Dow Corning is also providing a $10.0 million revolving credit facility to
Quebec Silicon to provide funding for its working capital requirements. Funding
is available to Quebec Silicon upon request at any time, up to the full amount
of the unused credit commitment and subject to continued compliance. Outstanding
amounts bear interest at a variable rate of Canadian prime plus 2%, which is
payable quarterly. The revolving credit facility expires on October 1, 2013, and
may be terminated earlier, at Dow Corning's discretion, if it ceases to own any
interest in Quebec Silicon or upon the occurrence of certain change of control
events in respect of Timminco. This facility includes customary negative debt
and negative pledge covenants. All of Quebec Silicon's assets have been pledged
to Dow Corning as security for Quebec Silicon's obligations under the revolving
credit facility.
Timminco also announced today that the maturity date of the Credit Agreement
with Bank of America has been extended for an interim period from September 30
to November 30, 2010, to facilitate on-going negotiations regarding a new
multi-year revolving credit facility for the Company. For the duration of such
period, the credit commitments have been reduced from $39.0 million to $20.0
million, the advance rates on eligible inventory have been capped at a reduced
level, certain slow-moving inventories have been deemed ineligible, the minimum
availability reserve has been increased to $5.0 million from $2.0 million, and
certain other post-closing deliveries are required as a condition for further
advances. All of the Company's assets, including Becancour Silicon's equity
interests in Quebec Silicon, continue to be pledged as security for the
Company's obligations under the Credit Agreement.
Timminco also announced today that Investissement Quebec has conditionally
agreed to an eight-year extension of the maturity date of the C$25.0 million
term loan advanced to Becancour Silicon in July 2009, from August 31, 2011 to
July 16, 2019, and certain other amendments to such term loan, subject to the
Company's execution of a new revolving credit facility by December 1, 2010 in an
amount and on terms that are satisfactory to Investissement Quebec. If the
conditions for such extension and amendment are satisfied, the term loan would
be repayable in monthly installments of C$175,000, starting August 2012, and
additional annual installments in amounts based on a percentage of Becancour
Silicon's defined adjusted cash flow, in respect of periods beginning August
2012. As well, Becancour Silicon would be obligated to remit 50% of any future
earn-out payments received from Dow Corning as repayment of any outstanding
obligations under such term loan. Investissement Quebec continues to have a
charge upon all of Becancour Silicon's assets, subordinated to the obligations
of the Company under the Credit Agreement with Bank of America.
About AMG
AMG creates and applies innovative metallurgical solutions to the global trend
of sustainable development of natural resources and CO(2) reduction. AMG
produces highly engineered specialty metal products and advanced vacuum furnace
systems for the Energy, Aerospace, Infrastructure and Specialty Metals and
Chemicals end markets. AMG consists of two operating divisions, Advanced
Materials and Engineering Systems, and owns interests in publicly-listed
companies Graphit Kropfmühl AG (Deutsche Börse: GKR.DE) and Timminco Limited
(TSX: "TIM").
The Advanced Materials Division develops and produces specialty metals, alloys
and high performance materials. AMG is a significant producer of specialty
metals, such as ferrovanadium, ferronickel-molybdenum, aluminum master alloys
and additives, chromium metal and ferrotitanium, for Energy, Aerospace,
Infrastructure and Specialty Metal and Chemicals applications. Other key
products include specialty alloys for titanium and superalloys, coating
materials, tantalum and niobium oxides, vanadium chemicals and antimony
trioxide.
The Engineering Systems Division designs, engineers and produces advanced vacuum
furnace systems and operates vacuum heat treatment facilities, primarily for the
Aerospace and Energy (including solar and nuclear) industries. Furnace systems
produced by AMG include vacuum remelting, solar silicon melting and
crystallization, vacuum induction melting, vacuum heat treatment and high
pressure gas quenching, turbine blade coating and sintering. AMG also provides
vacuum case-hardening heat treatment services on a tolling basis.
Graphit Kropfmühl AG is a majority controlled, publicly listed subsidiary of
AMG. Based on its secure raw material sources in Africa, China and Europe,
Graphit Kropfmühl is a specialist in the production of silicon metal and the
extraction, processing and refining of natural crystalline graphite for a wide
range of energy saving industrial applications.
Timminco Limited is a publicly listed affiliate of AMG. Timminco produces
silicon metal for the chemical, aluminum, electronic and solar industries.
Timminco also produces solar grade silicon, using its proprietary technology for
purifying silicon metal, for the solar energy industry.
With over 2,300 employees, AMG operates globally with production facilities in
Germany, the United Kingdom, France, Czech Republic, the United States, Canada,
Mexico, Brazil, and Sri Lanka and also has sales and customer service offices in
Belgium, Russia, China and Japan (www.amg-nv.com).
For further information please contact:
AMG Advanced Metallurgical Group N.V. +1 610 975 4901
Jonathan Costello
Vice President of Corporate Communications
jcostello(at)amg-nv.com
Disclaimer
Certain statements in this press release are not historical facts and are
"forward looking." Forward looking statements include statements concerning
AMG's plans, expectations, projections, objectives, targets, goals, strategies,
future events, future revenues or performance, capital expenditures, financing
needs, plans and intentions relating to acquisitions, AMG's competitive
strengths and weaknesses, plans or goals relating to forecasted production,
reserves, financial position and future operations and development, AMG's
business strategy and the trends AMG anticipates in the industries and the
political and legal environment in which it operates and other information that
is not historical information. When used in this press release, the words
"expects," "believes," "anticipates," "plans," "may," "will," "should," and
similar expressions, and the negatives thereof, are intended to identify forward
looking statements. By their very nature, forward looking statements involve
inherent risks and uncertainties, both general and specific, and risks exist
that the predictions, forecasts, projections and other forward looking
statements will not be achieved. These forward looking statements speak only as
of the date of this press release. AMG expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward looking
statement contained herein to reflect any change in AMG's expectations with
regard thereto or any change in events, conditions or circumstances on which any
forward looking statement is based.
[HUG#1448510]
AMG affiliate Timminco announces closing of joint venture with Dow Corning:
http://hugin.info/138060/R/1448510/390773.pdf
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Source: AMG Advanced Metallurgical Group N.V. via Thomson Reuters ONE
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Datum: 01.10.2010 - 20:28 Uhr
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