MONTRÉAL AND VANCOUVER, April 11, 2012 /CNW/ - EACOM Timber Corporation (TSXV: ETR) ("EACOM", or the "Company") today announced that it has successfully closed its previously announced $40 million secured debenture financing (the "Transaction").
The net proceeds of the $40 million 10% senior secured debentures due April, 2017 will be used for general corporate purposes. An aggregate of 200 million common share purchase warrants were also issued as part of the Transaction at an exercise price of $0.20 per common share.
As part of the Transaction, Fairfax Financial Holdings Limited is entitled to nominate two directors to EACOM's board. Mr. Chris Hodgson has been appointed as an independent director to the Board, subject to TSX-V approval. Fairfax is entitled to nominate an additional director in the future.
Rick Doman, President and CEO stated "We are delighted to have additional strength in our institutional base with the addition of the Fairfax Financial group participation in the Transaction. We are also very happy to have two of our existing institutions, Lansdowne UK Strategic Investment Master Fund Limited and Radcliffe group also participate."
"We welcome Chris to the Board and look forward to working with him. Chris has a vast amount of experience and expertise that will add value to our already strong and independent Board" commented Terry Lyons, Chairman of EACOM.
EACOM Timber Corporation is a TSX-V listed company. EACOM owns eight sawmills, all located in Eastern Canada, and related tenures. The mills are Timmins, Nairn Centre, Gogama, Elk Lake and Ear Falls in Ontario, and Val-d'Or, Ste-Marie and Matagami in Quebec. The sawmills in Ear Falls, Ontario and Ste-Marie, Quebec, are currently idled. Operations in Matagami and Val-d'or are currently on temporary shut down. These temporary measures primarily relate to the impact of low lumber prices for stud grade lumber products, the strong CDN dollar and the impact of the 7.6 percent tax imposed on shipments to the U.S. EACOM also owns a remanufacturing facility and a 50% interest in an "I" joist plant.
The TSX Venture Exchange has neither approved nor disapproved the content of this press release. The TSX Venture Exchange must approve the appointment of any officer or director.
All statements in this news release that are not based on historical facts are "forward-looking statements." While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under the captions "Risk Factors" of the Filing Statement dated January 8, 2010 and the current MD&A for EACOM Timber Corporation on file with the Canadian Securities Commissions.
For further information:
Executive Vice-President and Chief Financial Officer