Avcorp completes rights offering

    Common Stock Listed
    Trading Symbol: AVP

VANCOUVER, Oct. 8 /CNW/ - Further to its press releases dated July 14, 2009 and August 31, 2009, Avcorp Industries Inc. ("Avcorp" or the "Company") (TSX: AVP) announced that its previously announced rights offering (the "Offering") has been completed. Pursuant to the Offering, Avcorp will issue in total 129,259,718 common shares ("Common Shares") at a subscription price of $0.06 per Common Share (the "Subscription Price"), providing gross proceeds of C$7,755,583. The Company will receive aggregate net proceeds of C$4,385,934, after setoff against certain loan obligations owed to Panta Holdings B.V. ("Panta") (as described below). The Company's total issued and outstanding Common Shares will increase to 177,732,112.

As described in the prospectus for the Offering, Panta agreed to purchase from the Company at the Subscription Price any Common Shares that were not otherwise subscribed for under the Rights Offering (the "Standby Commitment"). In addition, in consideration for Panta agreeing to provide the Standby Commitment, Avcorp granted to Panta the right to subscribe for up to 8,078,733 additional Common Shares at the Subscription Price (the "Standby Fee Option"). In connection with the Offering, Panta acquired 56,160,821 Common Shares on the exercise of rights, the Standby Commitment and the exercise of the Standby Fee Option. The aggregate Subscription Price for such Common Shares of C$3,369,649 was set off against amounts owing to Panta under a C$4 million bridge loan, and Avcorp will use a portion of the proceeds from the Offering to pay off the balance of this loan. Panta will hold approximately 40.7% of the issued and outstanding Common Shares.

About Avcorp

Avcorp designs and builds major airframe structures for some of the world's leading aircraft companies, including Boeing, Bombardier, and Cessna. With more than 50 years of experience, approximately 500 skilled employees and 354,000 square feet of facilities, Avcorp offers integrated composite and metallic aircraft structures to aircraft manufacturers, a distinct advantage in the pursuit of contracts for new aircraft designs, which require lower-cost, light-weight, strong, reliable structures. Avcorp is a Canadian public company traded on the Toronto Stock Exchange (TSX:AVP).



Forward-Looking Statements

Certain statements in this release and other oral and written statements made by the Company from time to time, including in this release, are forward-looking statements, including those that discuss strategies, goals, outlook or other non-historical matters; or projected revenues, income, returns or other financial measures. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in the statements, including the following: (a) the extent to which the Company is able to achieve savings from its restructuring plans; (b) uncertainty in estimating the amount and timing of restructuring charges and related costs; (c) changes in worldwide economic and political conditions that impact interest and foreign exchange rates; (d) the occurrence of work stoppages and strikes at key facilities of the Company or the Company's customers or suppliers; (e) government funding and program approvals affecting products being developed or sold under government programs; (f) cost and delivery performance under various program and development contracts; (g) the adequacy of cost estimates for various customer care programs including servicing warranties; (h) the ability to control costs and successful implementation of various cost reduction programs; (i) the timing of certifications of new aircraft products; (j) the occurrence of further downturns in customer markets to which the Company products are sold or supplied or where the Company offers financing; (k) changes in aircraft delivery schedules or cancellation of orders; (l) the Company's ability to offset, through cost reductions, raw material price increases and pricing pressure brought by original equipment manufacturer customers; (m) the availability and cost of insurance; (n) the Company's ability to maintain portfolio credit quality; (o) the Company's access to debt financing at competitive rates; and (p) uncertainty in estimating contingent liabilities and establishing reserves tailored to address such contingencies.

The Company does not undertake any obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, except as required by law. Other than as specifically required by law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results or otherwise.

SOURCE Avcorp Industries Inc.

For further information: For further information: Sandi DiPrimo, Investor Relations Contact, (604) 587-4938

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