Shermag Inc. accepts an offer to purchase and will ask the Superior Court of Québec to approve the transaction with Groupe Bermex Inc. - Shermag Inc. announces that its common shares are delisted from the TSX

    SHERBROOKE, QC, Aug. 3 /CNW Telbec/ - Shermag Inc. (TSX:SMG) announced
today that it will ask the Superior Court of Québec on August 5, 2009 to
approve a transaction between the Company and Groupe Bermex Inc ("Bermex")
further to Bermex's offer which the Company accepted on July 31 last (the
"Transaction"). Pursuant to said Transaction, Bermex will provide $1,250,000
to the Company so as to finance its plan of arrangement that it intends to
present to its creditors under the Companies' Creditors Arrangement Act
("CCAA"). In consideration for said sum, the Company will issue to Bermex
41,666,667 new common shares from its share-capital which will represent
approximately 70% of the issued and outstanding shares of the Company.
    Furthermore, the Transaction provides that Bermex will finance the
operations of the Company until the closing of the Transaction through an
interim financing of up to $3,000,000. The Company will also ask the Court to
approve such interim financing on August 5 next.
    The Transaction is an essential step towards the completion of Shermag's
restructuring efforts and the presentation of a plan of arrangement to its
creditors. The Transaction will also allow Shermag to preserve approximately
225 jobs.
    Shermag has been operating under the protection of the CCAA since May 5,
    In addition, the Company announced that its shares have been delisted
from the TSX. The delisting took effect when the market closed on July 31,


    Shermag Inc., headquartered in Sherbrooke, Québec, designs, produces,
markets and distributes high-quality residential furniture. Shermag presently
has 227 active employees and is a manufacturer and importer with its
manufacturing operations and global sourcing division.


    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.

For further information:

For further information: Shermag Inc., (819) 566-1515

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