MFC Industrial Receives Regulatory Approvals For Acquisition Of Western European Bank

NEW YORK, Jan. 11, 2016 /PRNewswire/ -- MFC Industrial Ltd. ("MFC" or the "Company") (NYSE: MIL) is pleased to announce that, further to its news releases dated December 31, 2015, it has received all necessary regulatory approvals to complete the acquisition of BAWAG Malta Bank Ltd., a Western European bank (the "Bank").

Bank Acquisition

Pursuant to the transaction, MFC will acquire the Bank from BAWAG P.S.K. Bank fur Arbeit und Wirtschaft und Osterreichische Postsparkasse Aktiengesellschaft for consideration equal to the net realizable value of the Bank at the time of closing, which the Company expects will be approximately €86 million. The Company expects that the acquisition will have no material impact on its liquidity.

As the Company has received all requisite approvals for the acquisition of the Bank, including the approvals of the European Central Bank and the Malta Financial Services Authority, it expects to complete the acquisition within January 2016, at which time the Bank will be renamed "MFC Merchant Bank Ltd."

Upon completion of the transaction, the Bank will focus on trade finance and merchant banking and will not be engaged in retail or general commercial banking activities. The Company expects to outsource the majority of the Bank's backroom operations, which will allow the Company to manage associated costs on a variable basis.

Long-Term Strategy

In the first quarter of 2015, we announced our strategy to leverage our trade finance and supply chain platform by offering additional and complementary trade and structured finance services and solutions to our existing customer base. Our organisation has a track record of over 20 years in the field of structured supply chain transactions and the proposed Bank acquisition is an integral part of this strategy.

Through ownership of an "in-house" bank, we will be able to supplement our core business with additional targeted trade and structured finance products, including, among others, collateral-based lending to suppliers and customers, factoring, discounting and forfaiting of receivables and issuing sureties.

To advance our strategy and focus our priority, in 2015, we announced a strategic initiative to rationalize and deconsolidate our hydrocarbon and other resource assets. We have progressed with this plan and do not expect these discontinued assets to have a significant impact on our continuing operating results going forward.

We believe that in order to successfully integrate the Bank and achieve our goals, we will need to rely on our strengths, being:

• Longstanding relationships with our existing customers and suppliers and financial institutions
• The experience of our management and other personnel located in strategic locations
• Experience in industrial markets and logistics
• Experience in structured trade finance
• Our financial discipline
• Our strong cash and liquidity positions.

The following table provides highlights of our financial position as of September 30, 2015:

Gerardo Cortina, President and Chief Executive Officer of the MFC stated: "We are pleased to announce the receipt of requisite regulatory approvals and move forward with completing this acquisition. The addition of a bank to the MFC group is a significant step towards realizing on our long-term plans and, along with the other actions we have taken in the last year, will enhance the value of the company for our shareholders."

Mr. Cortina concluded: "We would like to thank everyone who has assisted with the Bank acquisition thus far, especially the professionals at Ganado Advocates, Heyne & Schweizer Rechtsanwalte and Deloitte and the executives at BAWAG P.S.K. Bank fur Arbeit und Wirtschaft und Osterreichische Postsparkasse Aktiengesellschaft. We look forward to welcoming our new colleagues at the Bank to MFC.

About MFC

MFC is a finance and supply chain company, which facilitates the working capital and other requirements of our customers and suppliers.  Our business activities involve customized structured financial solutions and are supported by captive sources and products secured by third parties.  We do business in multiple geographies and specialize in a wide range of industrial products such as metals, minerals, electricity/power, steel products, ferro-alloys, chemicals and wood products.

Disclaimer for Forward-Looking Information

This news release contains statements which are, or may be deemed to be, "forward-looking statements" which are prospective in nature, including, without limitation, statements regarding anticipated benefits of the Company's Bank acquisition, future business prospects and any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "scheduled", "estimates", "forecasts", "projects", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, revenues, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause our actual results, revenues, performance or achievements to differ materially from our expectations include, among other things: (i) periodic fluctuations in financial results as a result of the nature of our business; (ii) economic and market conditions; (iii) competition in our business segments; (iv) our ability to complete the Bank acquisition, including satisfying remaining customary conditions; (v) our ability to integrate and realize the anticipated benefits of our acquisitions, including the acquisition of the Bank; (vi) counterparty risks; and (vii) other factors beyond our control. Such forward-looking statements should therefore be construed in light of such factors. Other than in accordance with its legal or regulatory obligations, the Company is not under any obligation and the Company expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additional information about these and other assumptions, risks and uncertainties are set out in our Annual Report on Form 20F filed with the U.S. Securities and Exchange Commission and our Management's Discussion and Analysis for the three and nine months ended September 30, 2015, filed with the Canadian securities regulators.

SOURCE MFC Industrial Ltd.