Electrohome to wind-up through a plan of arrangement

    KITCHENER, ON, Aug. 5 /CNW/ - Electrohome Limited announced today that is
planning an orderly wind-up of the Corporation pursuant to a court supervised
plan of arrangement.
    The plan of arrangement proposed by the Corporation under the Business
Corporations Act (Ontario) provides an expeditious and efficient way for the
Corporation to sell its remaining assets, satisfy its outstanding obligations
and maximize the amount of residual proceeds that can be distributed to its
shareholders prior to the dissolution of the Corporation, all in an orderly
fashion within a condensed and finite timeframe under the supervision of the
    The proposed plan of arrangement includes the sale of the Corporation's
investment in Mechdyne Corporation, fulfillment and/or discharge of the
Corporation's outstanding liabilities and obligations, cancellation of the
issued and outstanding Class X Shares and the Class Y Shares, delisting of the
Corporation's shares from the NEX board of the TSX Venture Exchange and the
ceasing of the Corporation to be a reporting issuer, change of the
Corporation's name to ELXY Holdings Inc., change in the Corporation's minimum
number of directors from 3 to 1, appointment of an administrative agent to
assist the Corporation with implementation of the plan of arrangement,
distribution to shareholders of any residual proceeds, and dissolution of the
    As part of the plan of arrangement the Corporation proposes to sell its
shares of Mechdyne Corporation back to Mechdyne in exchange for an initial
cash payment of US $616,444 and a 10 year promissory note in the amount of
US $3,082,222 bearing interest at an annual rate of 4.3% with principal
payments subject to Mechdyne's annual earnings. Since the Corporation intends
to wind up its operations, the Corporation's Chairman, President, Chief
Executive Officer and controlling shareholder, Mr. John A. Pollock, has agreed
to purchase the 10 year promissory note from the Corporation for a cash amount
of US $2,394,592. A committee of independent directors of the Corporation
reviewed the proposed sale transactions and engaged Deloitte & Touche LLP to
provide it with an independent fairness opinion. The committee of independent
directors determined that the sale transactions are fair to the minority
shareholders of the Corporation.
    In the interests of maximizing the amount of residual proceeds that can
be distributed to shareholders, Mr. Pollock has also agreed to forgo payment
of the amount of $450,000 with respect to the funding of his supplemental
retirement plan with the Corporation. An independent actuary has determined
that the liability of the Corporation to fully fund the retirement benefits
under this plan is approximately $700,000.
    A special meeting of the Class X and Class Y shareholders of the
Corporation will be held on September 11, 2008 to consider and vote on the
proposed plan of arrangement.
    As previously announced, SYNNEX Canada Limited plans to continue to
market and sell Electrohome branded consumer electronic products pursuant to
the sale of the Corporation's trademarks and a related licensing agreement
made with SYNNEXX Canada earlier this year.

    TSX Venture Exchange has not reviewed and does not take responsibility
    for the adequacy or accuracy of this release.

For further information:

For further information: John A. Pollock, Chairman and Chief Executive
Officer or Gary Dumoulin, Vice-President and Secretary at (519) 749-3319

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