Keystone North America Inc. announces agreements to repurchase and cancel C$16 million in separate subordinated notes and anticipated expansion of the Keystone America Inc. senior credit facility



    TORONTO, July 25 /CNW/ - Keystone North America Inc. (TSX: KNA; KNA.UN)
(the "Company") announced today that it has reached an agreement with Linden
Capital LP and Boone Capital Management LP to repurchase for cancellation
C$16 million in principal amount of subordinated notes (the "Notes"). The
Notes represent the entire principal amount of the subordinated notes that
were issued on a private placement basis and that have not at any time been
represented by the Company's income participating securities. The repurchase
is expected to occur on or before July 31, 2008 and is subject to certain
conditions, including that the Company obtain sufficient financing.
    In connection with obtaining the required financing, the Company, through
its wholly-owned subsidiary Keystone America, Inc., announced an anticipated
increase of US$15 million under its senior credit facility. The additional
financing increases the total funds available under the facility to
US$88 million, of which US$51.8 million is currently outstanding.
    The repurchase of the Notes is expected to be financed using funds
available under the senior credit facility and proceeds from the liquidation
of foreign currency contracts that the Company holds for the interest payable
on the Notes. As disclosed in the Company's short form prospectus dated
April 14, 2008, the Note repurchase and cancellation represents another
significant step in the Company's transition to a common share structure and
is expected to be immediately accretive, saving an anticipated US$1.0 million
in interest on an annual basis.

    
                         FORWARD LOOKING INFORMATION
    

    Certain statements in this news release are "forward-looking statements",
which involve disclosure about possible events, conditions and results that
are based on assumptions about future economic conditions and courses of
action. Wherever possible, words such as "anticipates" or "expects" and
similar expressions or statements that certain actions, events or results
"will" be taken, occur or be achieved have been used to identify these
forward-looking statements. The forward-looking statements contained in this
news release are based upon certain assumptions about such events, conditions
and results, including with respect to, among others, the Company's capital
structure, its available financing, satisfaction of the conditions contained
in the note purchase agreements and the actions of third parties. While
management believes that its assumptions are reasonable, investors cannot be
assured that actual results will be consistent with these forward-looking
statements, and the differences may be material. A number of factors could
cause actual results to differ materially from the results discussed in the
forward-looking statements including, among others, those described under the
heading "Risk Factors" in the Company's annual information form dated
March 27, 2008 and the Company's short form prospectus dated April 14, 2008,
which risk factors are incorporated herein by reference. However, the risk
factors set out therein are not exhaustive of the factors that may affect any
of the Company's forward-looking statements. Further information regarding
these and other factors is included in the Company's public filings with
Canadian securities regulatory authorities. These forward-looking statements
are made as of the date of this news release and, except as otherwise required
by law, the Company assumes no obligation to update or revise them to reflect
new events or circumstances.

    %SEDAR: 00021578E




For further information:

For further information: Steven A. Tidwell, Chief Executive Officer,
(813) 225-4653, stidwell@keystonegroup.com; Stephen Shaffer, Chief Financial
Officer, (813) 225-4654, sshaffer@keystonegroup.com or please visit our
investor website at http://www.keystonenorthamerica.ca

Organization Profile

KEYSTONE NORTH AMERICA INC.

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