Catalyst Fund Limited Partnership II Announces Intention to Oppose Consent Solicitation by IMAX Corporation



    Other noteholders of 9.625% Senior Notes Due 2010 join Catalyst in
opposition; S&P and Moody's place IMAX ratings under review as accounting
irregularities not yet contained

    TORONTO, April 5 /CNW/ - Catalyst Fund Limited Partnership II, a
significant holder of senior notes (9.625% Senior Notes Due 2010) in IMAX
Corporation, announces its intention to oppose IMAX's consent solicitation
seeking waiver of reporting defaults. Catalyst is working with a group of
bondholders (together, the "Opposing Bondholders") to ensure the serious
issues attendant to the consent solicitation and IMAX's financial reporting
failures are addressed. Other noteholders of 9.625% Senior Notes Due 2010 are
urged to contact Catalyst.

    As noted above, the waiver request comes at a time when the ratings
agencies have put the credit rating of the bonds under negative review and the
Opposing Bondholders are most concerned that the impact of the financial
restatements is not yet contained and will further deteriorate the credit
quality of the bonds.

    On April 3, 2007, IMAX Corporation commenced a formal consent
solicitation seeking a waiver and related amendments of the indenture
governing the company's 9.625% Senior Notes Due 2010, in order to extend the
deadline to file its Annual Report on Form 10-K for the year ended December
31, 2006 and all other reports required to be filed by it under the Securities
Exchange Act of 1934, until May 31, 2007 or, at its election, until June 30,
2007 (the "Consent Solicitation"). IMAX's media release accompanying the
consent solicitation claims the company already has obtained 67% of the
consents necessary to effectuate the waiver and amend the bond indenture.

    The Opposing Bondholders contend that there are at least two serious
flaws in the consent solicitation itself, in addition to at least three
serious concerns regarding the process and circumstances under which IMAX has
undertaken to obtain the waiver and amend the bond indenture. The Opposing
Bondholders contend that the waiver and amendment sought pursuant to the
consent solicitation are broader than portrayed by IMAX in its public
statements relating to the waiver. Set forth nearly halfway through the
consent solicitation is the proposed waiver, which purports to waive "any Past
Default or Event of Default" arising out of IMAX's failure to comply with the
Section 1019 reporting provisions of the indenture. Given that the company has
publicly acknowledged potentially serious accounting and reporting issues
spanning six years or more, it is unclear whether the requested waiver is
intended to cover not only the current Annual Report on Form 10-K but any
other potential defaults arising out any infirmities in prior financial
reporting. The Opposing Bondholders also contend that the proposed 1% consent
fee is woefully insufficient even if the waiver were limited to the reporting
requirements for the year ended December 31, 2006.

    Further, the Opposing Bondholders intend to explore any potential
wrongdoing by IMAX in connection with the company's delay in advising
noteholders of IMAX's inability to meet its financial reporting deadlines. On
March 16, 2007, the company filed with the Securities and Exchange Commission
a Form 12b-25 Notification of Late Filing, and indicated that its Form 10-K
filing was expected to be made within a 15-day grace period. Despite making
that indication publicly, IMAX apparently sought, only days later, a waiver
under its bank credit agreement--prior to advising the noteholders or the
public generally that it would be unable to file its Form 10-K within the
15-day grace period. IMAX's actions raise serious questions for the Opposing
Bondholders, both in respect of the veracity of the company's statements in
its initial 12b-25 Notification of Late Filing and its subsequent failure to
promptly notify the market of its inability to meet the requisite deadlines.
Finally, IMAX's apparent solicitation of only certain bondholders prior to
initiation of the formal consent solicitation raises serious concerns about
the process undertaken by IMAX and potential violation of the indenture terms.
The Opposing Bondholders intend to explore fully these issues, including with
respect to the validity of the purported pre-solicitation consents. The
Opposing Bondholders also have concerns about the circumstances and the state
of facts known by the company's board of directors and management at the time
of the recent negotiation of the compensation agreements for the co-chief
executive officers.

    For these reasons, Catalyst intends to withhold its consent. Noteholders
interested in addressing these significant issues should contact the Opposing
Bondholders, represented by Catalyst.




For further information:

For further information: Catalyst Fund Limited Partnership II Gabriel de
Alba, 416-945-3020 gdealba@catcapital.com

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Catalyst Fund Limited Partnership II

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