Genesis Worldwide Inc. announces purchase of term loan by Codding Enterprises L.P. and completion of new joint venture
VAUGHAN, ON, July 29 /CNW/ - Genesis Worldwide Inc. ("Genesis" or the "Company"), (TSX: GWI), a provider of 'green' structural building products and technology in the light steel structural products industry, is pleased to announce that Codding Enterprises L.P. ("Codding"), a current shareholder of the Company, has completed the purchase of the term loan from the Company's lender (refer to Press Releases dated May 14 and April 28, 2010). Under the terms of the agreement, the term loan has been modified in several ways, including a reduction in the monthly loan payment, and removal of certain restrictive covenants. The original lender required the Company to provide a $500,000 irrevocable letter of credit issued by a Canadian chartered bank, which was fully secured by a restricted cash deposit of $500,000 at that bank. As part of the agreement, at its discretion, Codding may release all or part of this collateral to the Company for working capital purposes.
In addition, the Company is pleased to announce the completion of a joint venture transaction with Codding Steel Frame Solutions ("Codding SFS"), a manufacturer of light steel building structures, and current licensee of the Company, located in Northern California. As part of the transaction, a new entity, Genesis Steel Frame Solutions L.P., was established ("Genesis SFS"), and is headquartered at Sonoma Mountain Village, located in Rohnert Park, California. Genesis owns 40% of Genesis SFS and Codding Enterprises L.P., and other existing Codding SFS shareholders, owns 60%. In addition, Genesis has the option to purchase an additional interest in the joint venture. Genesis SFS has the exclusive rights to the Genesis technology in the United States, Central and South America, and the Caribbean. Genesis SFS will seek to grow its U.S. market share through maximizing the output of its Northern California operation, as well as through satellite operations in strategic locations. In addition, Genesis SFS will work to establish other joint ventures throughout its new territory.
Richard Pope, Chairman and CEO of Genesis, stated, "This new joint venture is a big step forward in the implementation of our new strategic plan."
J.R. Gunter, previously the President of Codding SFS, is now the President and CEO of Genesis SFS. Richard Pope, the Company's CEO, has assumed the role of Chairman of Genesis SFS.
In solidifying this new partnership, Codding SFS will provide an initial cash contribution, the building lease and manufacturing equipment, along with its tangible and non-tangible assets, management personnel, existing customer relationships, and existing business pipeline. Genesis will provide an initial cash contribution, intellectual property in the form of technology expertise, and management know-how regarding light steel structural elements. In addition, the existing license agreement that Codding SFS has with GenesisTP Inc., a subsidiary of the Company, will be terminated, and a new master license agreement will be entered between Genesis SFS and GenesisTP.
About Genesis Worldwide Inc.
Genesis is a provider of green light steel building systems and solutions targeted at the global commercial, residential and institutional building sectors. Genesis delivers customized turnkey structural solutions including innovative light steel products, and provides software packages, industrial equipment, training programs, professional services and support ("Genesis Solution") to its customers and partners globally. Headquartered in the Greater Toronto Area in Ontario, Canada, Genesis has established a network of partners with engineering, manufacturing and distribution operations in Canada, the United States, the Middle East, Eastern Europe and Russia. For additional information about the Company, visit www.genesisworldwide.com.
Caution Regarding Forward-Looking Information
Certain statements in this press release which are not historical facts constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws ("forward-looking statements") and are made pursuant to the "safe harbour" provisions of such laws. Statements related to the Company's projected revenues, earnings, growth rates, performance, business prospects and opportunities are forward-looking statements, as are any statements relating to future events, conditions or circumstances. The use of terms such as "may", "will", "should", "plan", "believes", "predict", "potential", "anticipate", "expect", "project", "target", "estimate", "continue", and similar terms are intended to assist in identification of these forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects, and opportunities. These assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect.
Readers are cautioned not to place undue reliance upon any such forward-looking statements. Such forward-looking statements are not promises or guarantees of future performance and involve both known and unknown risks and uncertainties that may cause the actual results, performance or achievements of the Company to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements.
Many factors could cause the actual results of the Company to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements, including, without limitation, those factors discussed under the heading "Risk Factors" in the Company's most recent Annual Information Form ("AIF"), a copy of each of which is available on SEDAR at www.sedar.com. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and, except required by law, the Company does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change.For further information: Genesis Worldwide Inc., Richard Pope, Chief Executive Officer, Tel: (905) 832-9286