MASKINONGÉ, QC, Oct. 14 /CNW Telbec/ - Groupe Bermex Inc. (the "Company") announced a subscription, by way of a private placement, to an additional number of 41,666,667 new common shares of Shermag Inc. (TSX:SMG) ("Shermag") for an aggregate consideration in money of $1,250,000, namely $0.03 per share (the "Subscription").
The Subscription has been realized under a subscription agreement entered into between Bermex and Shermag pursuant to the plan or arrangement filed by Shermag and sanctioned by the Superior Court of the District of Montreal on September 15, 2009, in accordance with the Companies' Creditors arrangement Act (the "Plan"). Under the Plan, the proceeds of the Subscription will be used by Shermag to settle the claims of the Shermag creditors.
Prior to the Subscription, Bermex was the registered holder of 2,612,900 common shares of Shermag, representing 19.6 % of the 13,348,724 common shares of Shermag then issued and outstanding. Following the Subscription, Bermex is the registered holder of 44,279,567 shares or 80.5 % of the 55,015,391 issued and outstanding common shares.
The closure of the transaction between Bermex and Shermag, including the Subscription, was completed on October 9 and all the conditions related to the disbursement of funds from the financing were met today. This puts an end to the stay of proceedings against Shermag who has been operating since May 5, 2008, under the Companies' Creditors Arrangement Act. It also enables Bermex to take control over Shermag and to pursue the restructuring of Shermag as well as its relaunching.
At the same time, the Company announced the election of Mr Richard Darveau from Groupe Bermex Inc. to the board of directors of Shermag and its subsidiaries and committees.
Groupe Bermex Inc., founded in 1983 and headquartered in Maskinongé, Québec, is one of North America's largest furniture manufacturers. Bermex presently has more than 575 active employees and has 13 plants.
Shermag Inc., headquartered in Sherbrooke, Québec, is a manufacturer and importer of high-quality residential furniture. Shermag presently has more than 210 active employees and is a manufacturer and importer with its manufacturing operations and global sourcing division.
This news release contains forward-looking statements about the companies' operations, objectives, strategies, financial situation and performance. These statements are made based on assumptions and management's best estimates with regard to future events. However, the business of the companies is subject to risks and uncertainties that could cause actual results to differ from expected results. Important factors that could cause such differences are changes in pricing pressure being exerted by competitors, particularly Asian-based companies, or significant movement in the Canadian/US dollar exchange rate. This is not an exhaustive list. A broader evaluation of risk factors that could affect future performance can be found in Shermag's Annual MD&A and Annual Information Form, filed with Canadian securities regulatory authorities. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The companies disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE SHERMAG INC.
For further information: For further information: Mrs. Josée Girard, CA, Vice-president, Finance, Shermag Inc., (819) 566-1515; Mr. Michel Martineau, CA, EÉE, Vice-president, Strategic Development, Groupe Bermex Inc., (819) 601-8702