Armtec Announces that Convertible Debentures Will Trade on an Interest Flat Basis

CONCORD, ON, April 1, 2015 /CNW/ - Armtec Infrastructure Inc. ("Armtec" or the "company") (TSX: ARF) announced today that the Toronto Stock Exchange (the "TSX") has advised Armtec that its 6.50% convertible unsecured subordinated debentures due 2017 (the "Convertible Debentures") (TSX: ARF.DB) will commence trading on an interest flat basis on April 2, 2015. 

The company announced on February 25, 2015 that it will not make any payments, including interest, on its Convertible Debentures or the 8.875% senior unsecured notes due September 22, 2017 of Armtec Holdings Ltd. (the "Senior Notes") unless its indebtedness to Brookfield Capital Partners Fund II LP is paid in full.  Similarly, the company has agreed with its operating lenders not to make any such payments unless the company's obligations to such operating lenders are fully satisfied. 

The TSX advised the company that as the TSX has no assurance that the company will be in a position to pay interest on the Convertible Debentures on the next interest payment date of June 30, 2015, all trades in the Convertible Debentures will commence trading at the opening on April 2, 2015 on an interest flat basis until further notice. The TSX has advised that it will not report accrued interest regarding any trades made on an interest flat basis to its participating organizations.

Armtec and its advisors continue to pursue the Sale and Investment Process described below and will continue to review the company's liquidity, financial covenants, leverage and capital structure. 

As disclosed in Armtec's news release dated February 25, 2015, the company has commenced a sale and investment process (the "Sale and Investment Process").  In the event no transaction emerges from the Sale and Investment Process or otherwise which would result in Brookfield's indebtedness being repaid in full, together with certain other liabilities of Armtec, Brookfield has agreed to indirectly acquire all of Armtec's assets in exchange for Brookfield's indebtedness (the "Brookfield Transaction").  Brookfield has also agreed to provide a new short-term facility of $20 million to Armtec which is available during the Sale and Investment Process. Armtec's trade creditors, as well as its obligations to employees, would be unaffected by the Brookfield Transaction and will continue to be paid in the ordinary course of business during Armtec's ongoing review of its strategic alternatives.

There can be no assurance that the Sale and Investment Process, an investment in the company or the Brookfield Transaction will provide any recovery for the holders of Armtec's existing Senior Notes, Convertible Debentures or common shares. Any recovery would be limited to sale or investment transaction proceeds in excess of the amount owing to Brookfield and Armtec's other senior lenders, which will be nil in the event Armtec pursues the Brookfield Transaction.

About Armtec Infrastructure Inc.

Armtec is a manufacturer and marketer of a comprehensive range of infrastructure products and engineered construction solutions for customers in a diverse cross-section of industries that are located in every region of Canada, as well as in selected markets globally. These markets include Canada's national and regional public infrastructure markets and private sector markets in agricultural drainage, commercial building, residential construction and natural resources. Armtec operates through a network of offices and production facilities across the country. Armtec operates in two business units: Drainage Solutions manufactures and markets corrugated high-density polyethylene pipe, corrugated steel pipe and other drainage related products including small bridge structures. Precast Concrete Solutions manufactures and markets highly engineered precast systems such as parking garages, bridges, sport venues and building envelopes as well as standard precast products such as steps, paving stones and utility vault.

Caution Concerning Forward-Looking Statements

This news release includes "forward-looking statements" within the meaning of securities laws.  Such statements relate to the company's or management's objectives, projections, estimates, expectations, or predictions of the future and can be identified by words such as "will", "anticipate", "estimate", "expect" and "project" or variations of such words.  These statements are based on certain assumptions and analyses by the company that reflect its experience and its understanding of future developments.  Such statements are subject to a number of uncertainties, including, but not limited to, the results of the Sale Process and receipt of the approvals necessary to implement the Brookfield Transaction or a Superior Transaction (as contemplated in Armtec's news release dated February 25, 2015), and other factors identified in the company's periodic filings with securities regulatory authorities in Canada.  Many of these uncertainties are beyond the company's control and, therefore, may cause actual actions or results to differ from those expressed or implied herein.  The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  The implementation of the Brookfield Transaction or a Superior Transaction is subject to a number of conditions, and other risks and uncertainties including, without limitation, court and any required regulatory approvals. Accordingly, there can be no assurance that the Brookfield Transaction or a Superior Transaction will occur, or that it will occur on the terms and conditions contemplated in this news release. The terms of the Brookfield Transaction could be modified, restructured or terminated by mutual agreement of the parties.

SOURCE Armtec Infrastructure Inc.

For further information: Carrie Boutcher, Vice President & Corporate Secretary, Armtec Infrastructure Inc., Tel: (647) 795-9290

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http://www.armtec.com

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