Westaim reduces ABCP exposure

About this update from Westaim Corporation

[{"type":"text","content":"\n\n\n\nCALGARY, Nov. 26 /CNW/ - The Westaim Corporation announced today that it\nhas reached an agreement to sell 50 per cent of its holdings in Canadian third\nparty asset-backed commercial paper (ABCP) with a book value of $7.0 million\nfor immediate proceeds of $6.0 million. Westaim retains the right to receive\nadditional proceeds in the event the buyer re-sells the related ABCP within\nsix months; in such event, Westaim will receive 50 per cent of any proceeds\nreceived by the buyer in excess of $7.2 million.\n\n\nWestaim has holdings in eight trusts affected by the ABCP market, which\nhas been frozen since mid-August 2007. As part of today's announced sale,\nWestaim has reduced its holdings in each of the eight trusts by 50 per cent.\nUntil the paper is restructured, or a market otherwise forms for this ABCP,\nWestaim cannot be certain of the ultimate value it will realize for its\nremaining holdings.\n\n\n"Westaim is diversifying its risk in this uncertain global credit\nmarket," said Drew Fitch, President & CEO of Westaim. "While we have the\noption to borrow against our ABCP holdings using the previously announced\ncredit line, we are taking a conservative approach by not being fully exposed\nto ABCP market values fully covered with debt."\n\n\nIn the third quarter, the Company wrote down its investment in ABCP by\n$3.0 million to $14 million. Following today's sale, the book value of\nWestaim's ABCP will be $7 million. The Company announced on November 2, 2007\nthe receipt of an offer, subject to final documentation, for a credit line of\n$12.6 million from a major financial institution. The credit facility will be\navailable for one year and will be secured by the equivalent value of ABCP\nheld by the Company. As a result of the Company's agreement to sell certain of\nits ABCP, the available credit on the proposed credit line will be reduced.\n\n\nThe Westaim Corporation's technology investments include iFire Technology\nCorp., which is developing a low-cost flat panel display, and a 74.6 per cent\ninterest in NUCRYST Pharmaceuticals Corp. (NASDAQ: NCST; TSX; NCS), which\ndevelops, manufactures and commercializes medical products that fight\ninfection and inflammation based on its nanocrystalline silver technology.\nWestaim's common shares are listed on The Toronto Stock Exchange under the\ntr...

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