Divcom Lighting Announces Additional Equity Investment of $550,000



    /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
    DISSEMINATION IN THE UNITED STATES/

    MONTREAL, Aug. 25 /CNW Telbec/ - Divcom Lighting Inc. ("Divcom" or the
"Company")(TSX: DVQ), a leading manufacturer of energy efficient lighting
products throughout North America, today announced its intention to effect a
non-brokered private placement of common shares at a price of $0.03 per share
to raise gross proceeds of approximately $550,000 (the "New Equity
Investment"). The New Equity Investment will involve the issuance of a maximum
of 18,333,333 common shares, representing 36.45% of the total number of common
shares of the Company outstanding prior to the New Equity Investment. Divcom
will use proceeds from the New Equity Investment to fund working capital.
    As part of the New Equity Investment, Aslam Khatri, Chief Executive
Officer and member of the board of directors of Divcom, will acquire
8,000,000 common shares, representing 15.91% of the common shares of the
Company outstanding prior to the New Equity Investment, for an aggregate
purchase price of $240,000, increasing his total holdings from 9,072,249
common shares or 18.04% of the Company's common shares outstanding prior to
the New Equity Investment, to 17,072,249 common shares or 24.88% of the
Company's common shares outstanding after the New Equity Investment. Joey
Khatri, Vice-President and member of the board of directors of Divcom, will
acquire 4,333,333 common shares, representing 8.62% of the common shares of
the Company outstanding prior to the New Equity Investment, for an aggregate
purchase price of $130,000, increasing his total holdings from 3,264,640
common shares or 6.49% of the Company's common shares outstanding prior to the
New Equity Investment, to 7,597,973 common shares or 11.07% of the Company's
common shares outstanding after the New Equity Investment. The balance of the
New Equity Investment will be made by arm's length investors, each of whom
will hold less than 10% of the common shares of the Company outstanding after
the transaction. Closing of the New Equity Investment, which is expected to
occur on September 3, 2008, is subject to certain conditions, including, but
not limited to, the receipt of necessary approvals, including the approval of
the Toronto Stock Exchange (the "TSX").
    As the New Equity Investment will result in a new holding of more than
20% of the voting securities of the Company by one securityholder, it is
deemed to be a transaction that materially affects control of the Company
under TSX rules. The independent directors of the Company, who are free from
any interest in the New Equity Investment and unrelated to the parties
involved in it, have recommended proceeding with the New Equity Investment.
Based on the recommendation of these directors, their belief that the Company
is in serious financial difficulty and their belief that the New Equity
Investment will improve the Company's financial situation, the Board believes
that the New Equity Investment is reasonable in the circumstances. The Company
is currently under delisting review by the Toronto Stock Exchange and must
regain compliance by October 1, 2008 in order to remain listed on the TSX.
    As the number of common shares to be issued under the New Equity
Investment (i) exceeds 25% of the current number of common shares issued and
outstanding, (ii) to insiders exceeds 10% of the current number of common
shares issued and outstanding, and (iii) is such that it will materially
affect control of the Company, TSX rules require that the private placement be
approved by disinterested shareholders. The Company is applying to the TSX for
an exemption from the requirement to seek shareholder approval, as required
pursuant to Sections 604(a) and 607(g) of the TSX Company Manual, in
accordance with Section 604(e) of the TSX Company Manual, on the basis of the
Company's financial hardship. In addition, due to the participation of issuer
insiders in the New Equity Investment, the transaction is a related party
transaction for the purposes of Multilateral Instrument 61-101 and the Company
is relying on exemptions from the formal valuation and minority approval
requirements of Multilateral Instrument 61-101, including based on a
determination of financial hardship. A material change report will be filed
less than 21 days before the closing date of the New Equity Investment. This
shorter period is reasonable and necessary in the circumstances as the Company
wishes to complete the New Equity Investment in a timely manner.
    This press release is not an offer to sell securities in the United
States. Securities may not be offered or sold in the United States in the
absence of registration or an exemption from registration.

    About Divcom

    Divcom is a leading North American manufacturer of architecturally
designed energy-efficient and "eco-friendly" lighting products for retail and
commercial markets across Canada and the United States. The Company's strategy
is to seize new business opportunities in the lighting industry and constantly
improve its energy efficient product lines. Divcom's products are distributed
through its extensive North American marketing network which includes more
than 2,000 distributors and agents. The Company's products are used for
residential houses, public roads and tunnels, as well as commercial,
industrial and custom-made lighting projects. For further information, please
visit www.divcomlighting.com

    Forward-Looking Statements

    Certain statements made in this press release and other statements
regarding our strategy, future operations, financial position, future
revenues, projected costs, prospects, plans and objectives other than
statements of historical facts are forward-looking statements. Such statements
are usually preceded by words such as "will", or "expects". We cannot
guarantee that we actually will achieve the results, plans, intentions or
expectations disclosed in our forward-looking statements and you should not
place undue reliance on them. There are a number of important factors that
could cause our actual results to differ materially from those indicated or
implied by forward-looking statements including, but not limited to, the
impact of any special items or of any dispositions, monetization, mergers,
acquisitions, business combinations or other transactions that may be
announced or that may occur after the date hereof. Risks that could cause
actual results to differ materially from those projected include, but are not
limited to, the effect of general economic conditions, decreases in demand for
the Company's products, increases in costs of raw materials, changes in the
relative value of the Canadian and U.S. currencies, and fluctuations in
selling prices. For a description of material risk factors, please refer to
the Company's annual information form and to our periodic filings with
securities regulatory authorities, which are available on SEDAR at
www.sedar.com. These factors should be read as being applicable to all related
forward-looking statements wherever they appear in this press release. The
information in this press release, including any forward-looking statements,
is provided as of the date of this release and should not be relied upon as
representing our estimates as of any subsequent date. We do not assume any
obligation to update or revise any forward-looking statements except as
required by law, whether as a result of new information, future events or
otherwise.
    %SEDAR: 00011838E




For further information:

For further information: Aslam Khatri, President and CEO, Divcom
Lighting, (514) 693-2117

Organization Profile

DIVCOM LIGHTING INC.

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