Cygnal Technologies provides financial update



    MARKHAM, ON, Nov. 5 /CNW/ - Cygnal Technologies Corporation (TSX:CYN)
today provided a financial update. Cygnal is currently engaged in discussions
with one of its principal lenders regarding the refinancing of its outstanding
debt owed to that lender, the continued availability of advances under
Cygnal's existing credit facility with that lender and the willingness of the
lender to extend the current maturity date of debt outstanding under that
credit facility due in January 2008. The lender has indicated that it is not
prepared to extend the maturity date of its debt nor extend additional credit
to Cygnal in the absence of certain concessions from Cygnal. Those concessions
may include a reduction or curtailment of certain of Cygnal's operations and a
sale of some or all of Cygnal's assets. Cygnal is engaged in discussions with
other parties regarding strategic alternatives, including the refinancing of
Cygnal's existing secured debt, the sale of an equity interest in Cygnal and a
sale of the entire company, and is reviewing other options.
    There can be no assurance that Cygnal's discussions with its existing
lender or such third parties will be successful or that its debt will be
refinanced. There can be no assurance that Cygnal will be able to generate
sufficient cash flow to repay that indebtedness when due and Cygnal requires
additional funds to satisfy its current working capital requirements. The
total amount of Cygnal's outstanding debt limits its ability to borrow
additional funds. If Cygnal is not successful in refinancing its existing debt
and raising additional funds for working capital, it will be required to
reduce or suspend its operations. The failure of Cygnal to repay its
outstanding indebtedness when due would constitute an event of default under
the terms of Cygnal's outstanding secured debt and could result in the loss of
some or all of its assets to foreclosure or sale. In that event, there can be
no assurance that Cygnal's assets would be sufficient to repay in full that
indebtedness.
    Cygnal also announced that its chief financial officer, Brian Pedlar, had
resigned effective today.

    About Cygnal

    Cygnal Technologies Corporation is a leading Canadian provider of network
communication solutions including the design, integration, installation,
maintenance and management of wired and wireless solutions and networks. The
Company offers a full range of technologies and solutions for service
providers and enterprise customers. Cygnal has expertise in voice, video and
data solutions over traditional and next generation converged technologies.
    Cygnal Technologies Corporation is headquartered in Markham, Ontario and
supports end-user customers and business partners through 12 offices across
Canada, including Vancouver, Edmonton, Calgary, Winnipeg, London, Burlington,
Toronto, Ottawa, Montreal, Quebec City and Halifax. Cygnal common shares are
listed on the Toronto Stock Exchange under the symbol CYN.

    This news release contains forward-looking statements. Often, but not
always, forward-looking statements can be identified by the use of words such
as "plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "guidance", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words and phrases
or state that certain actions, events or results "may", "could", "would",
"might" or "will" be taken, occur or be achieved. Forward-looking statements
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of Cygnal to be
materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Examples of such
statements include, but are not limited to: factors relating to trends in the
communications equipment and services industry, including (1) Cygnal's ability
to maintain and grow its revenues; (2) the opportunity for greater competition
to build network infrastructure; (3) the trend toward building next generation
core networks; (4) outsourcing by businesses of the design, build and
maintenance of their network infrastructure; and (5) an increased demand for
private broadband networks. Actual results and developments are likely to
differ, and may differ materially, from those expressed or implied by the
forward-looking statements contained in this news release. Such
forward-looking statements are based on a number of assumptions which may
prove to be incorrect, including, but not limited to: Cygnal's ability to meet
its obligations under its debt facilities; full implementation of Cygnal's
cost reduction plan; Cygnal's ability to compete and to adapt to technological
development; the continuation of the Company's relationships with its
suppliers; Cygnal's ability to recruit and retain qualified personnel; the
continuation of positive economic and market conditions, and the ability of
provisions in service agreements to limit exposure to potential claims. While
Cygnal anticipates that subsequent events and developments may cause its views
to change, Cygnal specifically disclaims any obligation to update these
forward-looking statements. These forward-looking statements should not be
relied upon as representing Cygnal's views as of any date subsequent to the
date of this news release.
    Although Cygnal has attempted to identify important factors that could
cause actual actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or intended.
There can be no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ materially from
those anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements. These factors are not intended
to represent a complete list of the factors that could affect Cygnal.

    %SEDAR: 00000748E




For further information:

For further information: Jeff Codispodi, Investor Relations, The Equicom
Group Inc., (416) 815-0700 ext. 261, jcodispodi@equicomgroup.com

Organization Profile

CYGNAL TECHNOLOGIES CORPORATION

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