CALGARY, Nov. 26 /CNW/ - The Westaim Corporation announced today that it
has reached an agreement to sell 50 per cent of its holdings in Canadian third
party asset-backed commercial paper (ABCP) with a book value of $7.0 million
for immediate proceeds of $6.0 million. Westaim retains the right to receive
additional proceeds in the event the buyer re-sells the related ABCP within
six months; in such event, Westaim will receive 50 per cent of any proceeds
received by the buyer in excess of $7.2 million.
Westaim has holdings in eight trusts affected by the ABCP market, which
has been frozen since mid-August 2007. As part of today's announced sale,
Westaim has reduced its holdings in each of the eight trusts by 50 per cent.
Until the paper is restructured, or a market otherwise forms for this ABCP,
Westaim cannot be certain of the ultimate value it will realize for its
"Westaim is diversifying its risk in this uncertain global credit
market," said Drew Fitch, President & CEO of Westaim. "While we have the
option to borrow against our ABCP holdings using the previously announced
credit line, we are taking a conservative approach by not being fully exposed
to ABCP market values fully covered with debt."
In the third quarter, the Company wrote down its investment in ABCP by
$3.0 million to $14 million. Following today's sale, the book value of
Westaim's ABCP will be $7 million. The Company announced on November 2, 2007
the receipt of an offer, subject to final documentation, for a credit line of
$12.6 million from a major financial institution. The credit facility will be
available for one year and will be secured by the equivalent value of ABCP
held by the Company. As a result of the Company's agreement to sell certain of
its ABCP, the available credit on the proposed credit line will be reduced.
The Westaim Corporation's technology investments include iFire Technology
Corp., which is developing a low-cost flat panel display, and a 74.6 per cent
interest in NUCRYST Pharmaceuticals Corp. (NASDAQ: NCST; TSX; NCS), which
develops, manufactures and commercializes medical products that fight
infection and inflammation based on its nanocrystalline silver technology.
Westaim's common shares are listed on The Toronto Stock Exchange under the
trading symbol WED.
This news release contains forward-looking statements. These statements
are based on current expectations that are subject to risks and uncertainties,
and Westaim can give no assurance that these expectations are correct. Various
factors could cause actual results to differ materially from those projected
in such statements, including but not limited to statements regarding the
potential receipt of additional proceeds, the ultimate value of Westaim's ABCP
holdings, diversification of risk, and the availability of credit. Westaim
disclaims any intention or obligation to revise forward-looking statements
whether as a result of new information, future developments or otherwise.
Accordingly, readers are advised not to place undue reliance on
forward-looking statements, and should not rely on this information at any
date other than the date of this news release. All forward-looking statements
are expressly qualified in their entirety by this cautionary statement.
For further information:
For further information: David Wills, Investor Relations, (416)
504-8464, email@example.com, www.westaim.com