Magellan Aerospace Corporation Announces Additional Financing

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[{"type":"text","content":"\n\n\n\nTORONTO, Feb. 4 /CNW/ - Magellan Aerospace Corporation ("Magellan")\nannounced today that the independent members of its Board of Directors have\napproved additional financing initiatives for Magellan consisting of a new\nsecured subordinated loan in the amount of $15 million (the "New Subordinated\nLoan"), the extension of the maturity of the pre-existing loan from Edco\nCapital Corporation of $50 million (the "Prior Subordinated Loan") to July 1,\n2010, the issuance of up to $40 million principal amount of convertible\nsecured subordinated debentures ("Convertible Secured Subordinated\nDebentures") and the continuation of one of Magellan's existing securitization\nprograms (the "Securitization") of up to $35 million of Canadian based\naccounts receivables, declining to $20 million by April 30, 2009 and to nil by\nDecember 31, 2009.\n\n\nThe New Subordinated Loan would be from Edco Capital Corporation, a\ncorporation wholly-owned by N. Murray Edwards, and would bear interest at 12%\nper annum, be due on July 1, 2010, and be collateralized and subordinated to\nMagellan's existing bank credit facility. The New Subordinated Loan would not\nbe convertible, redeemable or exchangeable for common shares of Magellan. Edco\nCapital Corporation has also agreed to extend the Prior Subordinated Loan,\nwhich is due on July 1, 2009, to July 1, 2010 in consideration of a one time\nfee of 1% of the principal amount of such loan and an increase in the interest\nrate from 10% per annum to 12% per annum on such loan. Each of the provision\nof the New Subordinated Loan, the extension of the prior Subordinated Loan,\nand the closing of the Convertible Secured Subordinated Debenture offering,\ndescribed below, are conditional on the extension of Magellan's existing bank\ncredit facility for at least one year to May, 2010 on terms satisfactory to\nthe Board of Directors of Magellan on or before April 30, 2009, and there\nbeing no material adverse change in the business, operations or capital of\nMagellan prior to closing.\n\n\nAs part of the financing initiatives, Mr. Edwards, directly or\nindirectly, has also agreed to purchase at least $25 million principal amount\nof the Convertible Secured Subordinated Debentures which would bear interest\nat 10%, payable semi-annually, be convertible at a...

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