CALGARY, Nov. 26 /PRNewswire-FirstCall/ - The Westaim Corporation announced today that it has reached an agreement to sell 50 per cent of its holdings in Canadian third party asset-backed commercial paper (ABCP) with a book value of $7.0 million for immediate proceeds of $6.0 million. Westaim retains the right to receive additional proceeds in the event the buyer re-sells the related ABCP within six months; in such event, Westaim will receive 50 per cent of any proceeds received by the buyer in excess of $7.2 million.
Westaim has holdings in eight trusts affected by the ABCP market, which has been frozen since mid-August 2007. As part of today's announced sale, Westaim has reduced its holdings in each of the eight trusts by 50 per cent. 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 remaining holdings.
"Westaim is diversifying its risk in this uncertain global credit market," said Drew Fitch, President & CEO of Westaim. "While we have the option to borrow against our ABCP holdings using the previously announced credit line, we are taking a conservative approach by not being fully exposed to ABCP market values fully covered with debt."
In the third quarter, the Company wrote down its investment in ABCP by $3.0 million to $14 million. Following today's sale, the book value of Westaim's ABCP will be $7 million. The Company announced on November 2, 2007 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 ABCP held by the Company. As a result of the Company's agreement to sell certain of its ABCP, the available credit on the proposed credit line will be reduced.
The Westaim Corporation's technology investments include iFire Technology Corp., which is developing a low-cost flat panel display, and a 74.6 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 the potential receipt of additional proceeds, the ultimate value of Westaim's ABCP holdings, diversification of risk, and the availability of credit. 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|
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