CALGARY, Nov. 2 /PRNewswire-FirstCall/ - The Westaim Corporation announced today the receipt of an offer, subject to final documentation, for a credit line of $12.6 million from a major financial institution. The credit facility will be available for one year and will be secured by the equivalent value of asset-backed commercial paper (ABCP) held by the Company.
Westaim previously announced that it held $19.7 million in ABCP. In September, the Company realized proceeds of $2.8 million upon the maturity of certain of its holdings, reducing its current ABCP holdings to approximately $17 million. These securities, which met the criteria of The Westaim Corporation's investment policy at the time of purchase, have been rated R-1 (high) by DBRS Limited. However, the market for $35 billion of third-party ABCP has been frozen since mid-August and until the paper is restructured, or a market otherwise forms for this ABCP, Westaim cannot be certain of the ultimate value it will realize for its holdings.
"While Westaim currently has sufficient non-ABCP cash and liquid investments, this facility greatly improves our liquidity and provides us the flexibility we need going forward," said Drew Fitch, President and CEO of Westaim. "We will continue to closely monitor the commercial paper situation and examine the optimal use of existing resources and assets."
At June 30, 2007, Westaim had a total of $33.9 million in cash and short-term investments, excluding the cash equivalents held by its 74.8 per cent owned affiliate NUCRYST Pharmaceuticals Corp.
The Westaim Corporation's technology investments include iFire Technology Corp., which is developing a low-cost flat panel display technology, and a 74.8 per cent interest in NUCRYST Pharmaceuticals Corp. (NASDAQ: NCST; TSX; NCS), which develops, manufactures and commercializes medical products that fight infection and inflammation based on its nanocrystalline silver technology. Westaim's common shares are listed on The Toronto Stock Exchange under the trading symbol WED.
This news release contains forward-looking statements. These statements are based on current expectations that are subject to risks and uncertainties, and Westaim can give no assurance that these expectations are correct. Various factors could cause actual results to differ materially from those projected in such statements, including but not limited to statements regarding final documentation of the credit facility, the repayment of mature securities, potential adverse consequences to Westaim in future, the sufficiency of Westaim's cash and liquid investments to continue operations, Westaim's intention to monitor the asset-backed commercial paper situation referred to in the news release, and potential steps to be taken by Westaim to ensure continued access to cash necessary to fund operations. Westaim disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise. Accordingly, readers are advised not to place undue reliance on forward-looking statements, and should not rely on this information at any date other than the date of this news release. All forward-looking statements are expressly qualified in their entirety by this cautionary statement.
|SOURCE Westaim Corporation|
Copyright©2007 PR Newswire.
All rights reserved