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Common Stock Listed
Toronto Trading Symbol: AVP
Sept. 27, 2012 /PRNewswire/ - Avcorp Industries Inc. ("Avcorp" or the "Company") (TSX: AVP) announced today that it has entered into a loan agreement with Royal Bank of
Canada ("RBC") for a
$12 million principal amount secured debt facility (the "Debt Facility"). The Debt Facility has a three-year term and bears interest at a rate equal to RBC's prime rate plus 0.5%.
The Debt Facility is secured by a charge and specific registration over all of the assets of the Company.
The Debt Facility will be used to repay amounts owing under the Company's facility with HSBC Bank Canada, the Company's secured term loan, and for general working capital purposes. This debt facility will significantly reduce the Company's cost of capital.
The Company also wishes to provide an update with respect to the transitioning of production work in 2011 and 2012 to Cessna Aircraft Company. An agreement with respect to the compensation and cost reimbursement in connection with the transition could not be reached, and the matter was referred to arbitration. The Company expects a ruling by the end of the year.
Avcorp designs and builds major airframe structures for some of the world's leading aircraft companies, including BAE Systems, Boeing, and Bombardier. With more than 50 years of experience, over 400 skilled employees and 354,000 square feet of facilities in
Delta BC and Burlington ON, Avcorp offers integrated composite and metallic aircraft structures to aircraft manufacturers, a distinct advantage in the pursuit of contracts for new aircraft designs, which require lower‐cost, light weight, strong, reliable structures. Our
Burlington location also offers composite repairs for commercial aircraft. Avcorp is a Canadian public company traded on the Toronto Stock Exchange (TSX:AVP).