Common Stock Listed
Trading Symbol: AVP
VANCOUVER, Sept. 27, 2012 /PRNewswire/ - Avcorp Industries Inc. ("Avcorp" or the "Company") (TSX: AVP) announced today that it has entered into a loan agreement with Royal Bank of Canada ("RBC") for a $12 million principal amount secured debt facility (the "Debt Facility"). The Debt Facility has a three-year term and bears interest at a rate equal to RBC's prime rate plus 0.5%.
The Debt Facility is secured by a charge and specific registration over all of the assets of the Company.
The Debt Facility will be used to repay amounts owing under the Company's facility with HSBC Bank Canada, the Company's secured term loan, and for general working capital purposes. This debt facility will significantly reduce the Company's cost of capital.
The Company also wishes to provide an update with respect to the transitioning of production work in 2011 and 2012 to Cessna Aircraft Company. An agreement with respect to the compensation and cost reimbursement in connection with the transition could not be reached, and the matter was referred to arbitration. The Company expects a ruling by the end of the year.
Avcorp designs and builds major airframe structures for some of the world's leading aircraft companies, including BAE Systems, Boeing, and Bombardier. With more than 50 years of experience, over 400 skilled employees and 354,000 square feet of facilities in Delta BC and Burlington ON, Avcorp offers integrated composite and metallic aircraft structures to aircraft manufacturers, a distinct advantage in the pursuit of contracts for new aircraft designs, which require lower‐cost, light weight, strong, reliable structures. Our Burlington location also offers composite repairs for commercial aircraft. Avcorp is a Canadian public company traded on the Toronto Stock Exchange (TSX:AVP).
MARK VAN ROOIJ
PRESIDENT and CHIEF EXECUTIVE OFFICER
This release should be read in conjunction with the Company's unaudited financial statements contained in the Company's Annual Report and with the quarterly financial statements and accompanying notes filed with Sedar (www.sedar.com).
Certain statements in this release and other oral and written statements made by the Company from time to time are forward-looking statements, including those that discuss strategies, goals, outlook or other non-historical matters; or projected revenues, income, returns or other financial measures. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in the statements, including the following: (a) the extent to which the Company is able to achieve savings from its restructuring plans; (b) uncertainty in estimating the amount and timing of restructuring charges and related costs; (c) changes in worldwide economic and political conditions that impact interest and foreign exchange rates; (d) the occurrence of work stoppages and strikes at key facilities of the Company or the Company's customers or suppliers; (e) government funding and program approvals affecting products being developed or sold under government programs; (f) cost and delivery performance under various program and development contracts; (g) the adequacy of cost estimates for various customer care programs including servicing warranties; (h) the ability to control costs and successful implementation of various cost reduction programs; (i) the timing of certifications of new aircraft products; (j) the occurrence of further downturns in customer markets to which the Company products are sold or supplied or where the Company offers financing; (k) changes in aircraft delivery schedules or cancellation of orders; (l) the Company's ability to offset, through cost reductions, raw material price increases and pricing pressure brought by original equipment manufacturer customers; (m) the availability and cost of insurance; (n) the Company's ability to maintain portfolio credit quality; (o) the Company's access to debt financing at competitive rates; and (p) uncertainty in estimating contingent liabilities and establishing reserves tailored to address such contingencies.
SOURCE Avcorp Industries Inc.