Business
Taiga Building Products Ltd. announces Rights Offering update, expected note interest defferal and a review of financing options
BURNABY, BC, March 23 /CNW/ - Taiga Building Products Ltd. (TSX: TBL), ("Taiga" or the "Corporati...
About this update from Taiga Building Products Ltd.
[{"type":"text","content":"\n\n\n\nBURNABY, BC, March 23 /CNW/ - Taiga Building Products Ltd. (TSX: TBL),\n("Taiga" or the "Corporation") today announced that:\n\n\nRights Offering:\n\n\nThe Corporation has received limited support in connection with its\npreviously-announced Rights Offering (the "Offering"). Under the Offering,\nshareholders were offered one right (a "Right") for each common share held to\npurchase 2.218 common shares of the Corporation at a price of $0.14 per share.\nBased upon: (i) the fact that the Rights exercise price of $0.14 per share no\nlonger represents a meaningful discount to the current trading price of the\ncommon shares; (ii) indications received from non-supporting shareholders; and\n(iii) the exercise of less than 1% of the Rights to date, Taiga expects that\nthe Offering will result in receipt of insufficient funds to address its\nworking capital and liquidity requirements. As a result of the low levels of\nanticipated participation by other Shareholders, the Corporation's two\nprincipal Shareholders have advised the Corporation that they will not\nexercise their Rights under the Offering.\n\n\nNote Interest Deferral:\n\n\nBased upon its internal, unaudited forecasts, Taiga anticipates that it\nwill be in a position to defer monthly interest payments on its Subordinated\nNotes effective early April, 2009. Taiga intends to elect to defer interest\npayable on the Subordinated Notes commencing on April 15, 2009 with respect to\ninterest accruing to March 31, 2009. Taiga's ability to defer such interest is\nsubject to meeting certain parameters under its Interest Coverage Ratio test,\nas set out in the Note Indenture. The Subordinated Note interest deferral will\nresult in an approximate $1.3 Million net cash savings per month. Taiga\nanticipates continuing to defer interest on the Subordinated Notes for the\nforeseeable future, provided it remains able to do so under the terms of the\nIndenture. The unpaid interest will accrue to the benefit of Noteholders and\nattract a further 14% interest on interest charge.\n\n\nCost Management:\n\n\nThe Corporation is undertaking major cost reduction initiatives in order\nto re-size its business model to the current environment of declining product\ndemand. Taiga is planning for and has begun to realize significant savings in\ninventory, selling...