/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES/
TSX STOCK SYMBOLS: NEM, NEM.WT
TORONTO, July 16 /CNW/ - Neo Material Technologies Inc. (TSX: NEM) (the
"Company") is pleased to announce that it has entered into an agreement with a
syndicate of underwriters, led by GMP Securities L.P. and including Clarus
Securities Inc., Cormark Securities Inc., Paradigm Capital Inc. and Raymond
James Ltd., that have agreed to purchase on a bought deal basis 16,000,000
Common Shares of the Company at a purchase price of $4.60 per Common Share,
for aggregate gross proceeds of approximately $73,600,000. The underwriters
will also have an option, exercisable for a period of 30 days following the
closing date, to purchase up to an additional 1,600,000 Common Shares at the
purchase price to cover over-allotments, if any. The Company intends to use
the net proceeds for the early retirement of its US$50,000,000 convertible
debenture at a negotiated total repurchase price of US$95,000,000.
The debenture was put in place August 2005 as part of the merger
transaction between AMR Technologies Inc. and Magnequench, Inc. The debenture
carries a 10% coupon and is convertible at $2.50 per share, representing, at
current exchange rates, an issuance of approximately 21,000,000 shares. The
Company's ability to eliminate the conversion of 21,000,000 shares, and
$5,000,000 in annual interest expense through the issuance of 16,000,000
shares and the use of a new debt facility bearing interest at a rate below
10 percent makes this an accretive transaction for all shareholders.
"Neo Material's ability to complete this transaction at $4.60 per share
demonstrates the strength of its financial and operational performance since
merging AMR and Magnequench in 2005." noted Constantine Karayannopoulos,
President and CEO. "We have made significant strides to improve Neo's balance
sheet and the completion of this accretive transaction further positions Neo
to enter the next phase of its growth strategy."
The Common Shares to be issued under this offering will be offered by way
of a short form prospectus in all of the provinces in Canada and in the United
States on a private placement basis pursuant to an exemption from the
registration requirements of the United States Securities Act of 1933, as
amended.
The offering is scheduled to close on or about August 2, 2007 and is
subject to certain conditions including, but not limited to, the receipt of
all necessary approvals including the approval of the Toronto Stock Exchange
and the securities regulatory authorities.
About Neo Materials
Neo Material Technologies is a producer, processor and developer of
neodymium-iron-boron magnetic powders, rare earths and zirconium based
engineered materials and applications through its Magnequench and AMR
Performance Materials business divisions. These innovative products are
essential in many of today's high technology products. Magnequench's neo
powders are used to produce bonded magnets, which are used in micro motors,
precision motors, sensors and other applications requiring high levels of
magnetic strength, flexibility, small size and reduced weight. Rare earth and
zirconium applications include catalytic converters, computers, television
display panels, optical lenses, mobile phones and electronic chips. The
Company is headquartered in Toronto, Canada and has approximately 1,300
employees in 15 locations, across 10 countries.
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES/
For further information: Michael Doolan, Chief Financial Officer, (416)
367-8588, ext.335, Website: www.neomaterials.com, e-mail:
info@neomaterials.com; Ali Mahdavi, Genoa Management, (416) 962-3300, ext.
225, e-mail: amahdavi@genoa.ca
