Magellan Aerospace Corporation announces Officer appointment and provides update on financing for payment of convertible debentures on maturity

    TORONTO, Jan. 28 /CNW/ - Magellan Aerospace Corporation ("Magellan" or
the "Corporation") is pleased to announce that Mr. James Butyniec has been
appointed as the President and Chief Executive Officer of Magellan effective
immediately. Mr. Butyniec was most recently Magellan's President and Chief
Operating Officer and has been with the Corporation since 1997 when it
acquired Bristol Aerospace Limited. Mr. Richard Neill, former Chief Executive
Officer of Magellan into 2007, will continue as Vice Chairman of the
    Magellan is also providing an update on the status of its proposed
financing arrangements to pay the currently outstanding principal amount of
approximately $70 million of 8.5% unsecured subordinated debentures (the
"Existing Debentures") in cash on the maturity date of January 31, 2008. The
Corporation had previously announced its intention to complete a private
placement of up to $35 million aggregate principal amount of 8.5% convertible
unsecured subordinated debentures due January 31, 2010 (the "New Debentures")
to fund, in part, the payments on maturity of the Existing Debentures. Edco
Capital Corporation, a corporation controlled by N. Murray Edwards, Magellan's
principal shareholder, had agreed to, directly or indirectly, loan $50 million
to the Corporation (the "Original Loan") to fund the repayment of the
remaining $35 million on the maturity of the Existing Debentures and to
provide the Corporation with funds to retire $15 million of subordinated debt.
    The Corporation has revised its proposed financing arrangements as it now
expects to raise approximately $20 million of aggregate principal amount of
New Debentures pursuant to the private placement which includes $17.5 million
principal amount of the New Debentures to be acquired by Mr. Edwards. The
remaining $50 million needed to fund the repayment on the maturity of the
Existing Debentures will be paid out of $35 million of the proceeds from the
Original Loan and from the proceeds of a new $15 million loan (the "Bridge
Loan") from Edco Capital Corporation. The Bridge Loan will be secured and will
be repayable on July 31, 2008 and will bear interest at 10% per annum. In
consideration for the provision of additional security for the Corporation's
obligations under its existing secured credit facility, the Corporation has
also agreed to increase the standby guarantee payable to Mr. Edwards from 0.1%
per annum to 1% per annum of the principal amount guaranteed.
    The above transactions are subject to regulatory approval, including the
Toronto Stock Exchange, and are expected to close on or before January 31,

    Magellan Aerospace Corporation is one of the world's most integrated and
comprehensive aerospace industry suppliers. Magellan designs, engineers, and
manufactures aeroengine and aerostructure assemblies and components for
aerospace markets, advanced products for military and space markets, and
complementary specialty products. Magellan is a public company whose shares
trade on the Toronto Stock Exchange (TSX: MAL), with operating units
throughout Canada, the United States and the United Kingdom.

    Forward Looking Statements:

    This press release contains information and statements of a
forward-looking nature concerning the plans of the Corporation in relation to
financing the repayment of its existing 8.5% Unsecured Subordinated
Convertible Debentures. These statements are based on assumptions and
uncertainties, including regulatory approvals and marketing of the securities,
as well as on management's reasonable evaluation of future events. These
statements are not guarantees of future performance and involve risks and
uncertainties that are difficult to predict, and/or are beyond the
Corporation's control. A number of important factors could cause actual
outcomes and results to differ materially from those expressed in these
forward-looking statements.

    %SEDAR: 00002367E

For further information:

For further information: John B. Dekker, Vice President Finance &
Corporate Secretary, (905) 677-1889 ext. 224, E:

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890