Marsulex completes redemption of its Senior Subordinated Notes and increase to senior credit facility



    TORONTO, March 1 /CNW/ - Marsulex Inc. (TSX: MLX) today completed the
previously announced redemption of its 9-5/8% Senior Subordinated Notes of
approximately US$61 million. Under the terms of the indenture, the notes were
redeemed at par together with accrued interest.
    The Company also finalized with its senior credit syndicate an amended
credit facility of $205 million, over a new 5-year term maturing on
February 28, 2012. The agreement provides for a $115 million Senior Secured
Term Loan, partly denominated in U.S. dollars, a $70 million Revolving Term
Facility, and a $20 million Revolving Operating Facility. The facilities carry
variable rates of interest and are secured by the assets of Marsulex Inc. and
its subsidiaries (excluding Marsol Canada Corporation). The facilities can be
drawn as LIBOR, bankers' acceptance loans with margins ranging from 100 to 225
basis points and prime rate loans with margins ranging from nil to 125 basis
points. The average interest rate on the outstanding balance as at March 1st,
2007 was 6.2%. Under the terms of the amended agreement, interest is paid
monthly with quarterly mandatory principal repayments for the Senior Secured
Term Loan beginning on March 31, 2010, with any drawn amounts due as follows:
16% by December 31, 2010, 18% by September 30, 2011, and 66% on maturity.

    
    A summary of sources and use of funds is as follows:

    -------------------------------------------------------------------------
    (in millions of dollars)
    -------------------------------------------------------------------------
    New facility                                                     $   205
    Available cash                                                        34
    -------------------------------------------------------------------------
                                                                         239
    Less:
      Repayment of Old Senior Secured Term Loans                        (101)
      Redemption of 9.625% Senior Subordinated Notes
       (U.S. $60.8 million), including interest                          (71)
    Refinancing costs                                                     (1)
    -------------------------------------------------------------------------
    Undrawn Senior Secured Credit Facility                           $    66
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    The amended credit facility also provides for $75 million in additional
financing for permitted acquisitions, subject to lender approval.
    The Company will incur a non-cash charge of approximately $1.8 million in
the first quarter of 2007 relating to deferred charges associated with the Old
Senior Secured Term Loans and Senior Subordinated Notes.
    In addition, the Company intends to file a Form 15 with the United States
Securities and Exchange Commission as certification of termination of its
registration under Section 12(g) of the Securities Exchange Act.

    Marsulex, which is based in Toronto, Ontario, is a leading provider of
industrial services, including environmental compliance solutions for air
quality control, processing or handling of industrial by-products or waste
streams, and is a producer and marketer of sulphur-based industrial chemicals.
The Company's services and products are provided to a broad base of industrial
customers in a wide range of industries. Website: www.marsulex.com

    This news release may contain forward-looking statements. These
statements are based on current views and expectations that are subject to
risks, uncertainties and assumptions that are difficult to predict, including
the impact of acquisitions, risks, uncertainties and assumptions relating to
the timing and market acceptance of future products, competition in the
Company's markets, the Company's reliance on customers, fluctuations in
currency exchange rates, commodity prices or interest rates, the Company's
ability to maintain good relations with its employees, changes in laws or
regulations regarding the environment or other environmental liabilities, the
Company's ability to integrate acquisitions and the Company's ability to
protect its intellectual property.
    Actual results might differ materially from results suggested in any
forward-looking statements whether as a result of new information, future
developments or otherwise. Additional information identifying risks,
uncertainties and assumptions is contained in the Company's filings with the
securities regulatory authorities, which are available at www.sedar.com. All
forward-looking statements are expressly qualified in their entirety by this
Cautionary Statement.

    %SEDAR: 00002943E




For further information:

For further information: Laurie Tugman, President and CEO, Tel: (416)
496-4157; or William Martin, Chief Financial Officer, Tel: (416) 496-4164

Organization Profile

MARSULEX INC.

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