SHERBROOKE, QC, Oct. 14 /CNW Telbec/ - Shermag Inc. (TSX:SMG) and its subsidiaries (the "Company"), including Jaymar Furniture Corp., today announced the closing of the transaction with Groupe Bermex Inc. ("Bermex") and the implementation of its plan of arrangement (the "Plan").
The said transaction has been approved by the Québec Superior Court on August 12, 2009 and had, according to the motion, to be concluded by October 16, 2009.The Company had already received the approval of the Plan by the creditors on September 10, 2009 and the Court sanctioned the Plan on September 15, 2009. The 21 day-period of time for appealing expired on October 6, 2009 and no request of motion to appeal was filed.
The Plan also foresaw the issuance of 41,666,667 common shares from Shermag to Groupe Bermex Inc. in a cash consideration payment of $1,250,000, which sum will pay the dividend to creditors, as scheduled in the Plan.
The Fonds de solidarité FTQ, Investissement Québec, and Accord Financial Inc. are the main financial partners in this project, allowing the complete refinancing of sums that were owed to Geosam Investments Limited, Shermag's secured creditor.
The closure of the transaction with Bermex 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 which has been operating since May 5, 2008, under the Companies' Creditors Arrangement Act (the "CCAA"). It also enables Bermex to take control over Shermag and to pursue the restructuring of the Company as well as its relaunching.
Furthermore, the Company announced the resignation of Mrs. Melinda Lee and Mr. Robert Normandeau as directors of the Company and its subsidiaries and committees. To fill the vacancy, Mr. Richard Darveau from Groupe Bermex Inc. and Mr. Gilles Genest from the Fonds de solidarité FTQ were appointed Directors of the Company, to hold office until the next annual meeting of shareholders.
Shermag Inc., headquartered in Sherbrooke, Québec, is a manufacturer and importer of high-quality residential furniture. Shermag presently has more than 210 active employees in its manufacturing operations and global sourcing division.
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.
This news release contains forward-looking statements about the Company's 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 Company 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 the Company'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 Company 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, ext. 2227