AMG Subsidiary Timminco Completes C$25 Million Equity Financing to Strengthen Balance Sheet

 

Amsterdam, 27 January 2009 — AMG Advanced Metallurgical Group N.V.’s (“AMG”, EURONEXT AMSTERDAM: “AMG”) 50.34% subsidiary Timminco Limited (“Timminco”; TSX: TIM) has agreed to issue a total of 7.04 million common shares at a price of C$3.55 per share for aggregate gross proceeds of C$25.0 million.  This equity financing will be by way of private placement to certain investors, including Timminco’s controlling shareholder, AMG.  AMG has agreed to subscribe for a minimum of 3.55 million common shares to be issued in this financing, at the same price per share offered to all other investors, representing C$12.6 million of the expected gross proceeds.  In addition, AMG has agreed to purchase any of the remaining 3.49 million common shares that are not subscribed for by other investors in this financing, at the same price per share, subject to normal closing conditions.  Proceeds of the financing will be used for general corporate purposes. 

“While we believe that based on our current cash position, existing credit facilities and expected cash flow from operations Timminco is adequately capitalized to finance the remainder of our capital expansion costs at our purification facilities in Bécancour, Quebec, we are completing this financing as a prudent contingency measure in light of the impact that the current global economic conditions are having on the solar photovoltaic industry,” said Mr. Robert J. Dietrich, Executive Vice President – Finance and Chief Financial Officer of Timminco.  “The additional capital from this financing will strengthen our balance sheet and enable us to better manage uncertainties associated with short-term demand from Timminco’s solar grade silicon customers, and potential risks with accounts receivable payment terms and outstanding customer deposits.  We are also complementing this equity financing with several programs to generate cash through the reduction of working capital.”

 

“We are pleased that AMG has demonstrated a vote of confidence in our Company and our business plans, by agreeing to participate in at least 50.4% – and, ­if necessary, up to 100% – of this financing,” added Mr. Dietrich.

 

“This funding should help enable Timminco to achieve its long-term goals,” stated Mr. William Levy, Chief Financial Officer of AMG.  “Despite the current economic situation, Timminco continues to offer a compelling value proposition to the crystalline solar market.”

 

The financing is being co-led by Clarus Securities Inc. and TD Securities Inc. as Timminco’s exclusive agents (the “Agents”).

 

AMG currently owns 52.56 million common shares of Timminco.  Upon completion of the private placement transaction, this is expected to increase to 56.11 million common shares, representing 50.34% of Timminco’s total issued and outstanding share capital after completion of the offering, assuming that the remaining 3.49 common shares are subscribed for by other investors.

 

Completion of this financing, which is expected on or about February 3, 2009, is subject to certain conditions, including execution of definitive documents and receipt of all necessary regulatory approvals, including approval of the Toronto Stock Exchange.  The common shares to be issued pursuant to this private placement will be subject to a four-month hold period from the date of closing.

 

 

 

AMG, incorporated in the Netherlands, is a global leader in the production of highly engineered specialty metal products and advanced vacuum furnace systems.  AMG serves growing industries worldwide with its unique combination of metallurgical engineering expertise and production know-how.  AMG is a market leader in many of its products and systems, which are critical to the production of key components for the aerospace, energy (including solar and nuclear), electronics, optics, chemicals, construction and transportation industries.  AMG has two operating divisions of businesses, Advanced Materials and Engineering Systems, and owns majority interests in publicly-listed companies Timminco Limited (TSX: “TIM”) and Graphit Kropfmühl AG (Deutsche Börse: GKR.DE). 

 

The Advanced Materials Division develops and produces niche specialty metals and complex metals products, many of which are used in demanding, safety-critical, high-stress environments.  AMG is one of a limited number of significant producers globally of niche specialty metals, such as ferrovanadium, ferronickel-molybdenum, aluminum master alloys and additives, chromium metal and ferrotitanium, used by steel, aluminum, chemical and superalloy producers for aerospace, automotive, energy, electronics, optics, chemicals, construction and other applications.  Other key products produced by AMG include specialty alloys for titanium and superalloys, coating materials, tantalum and niobium oxides, vanadium chemicals and antimony trioxide.

 

The Engineering Systems Division designs, engineers and produces advanced vacuum furnace systems and operates vacuum heat treatment facilities.  AMG is a global leader in supplying technologically-advanced vacuum furnace systems to customers in the aerospace, energy (including solar and nuclear), transportation, electronics, superalloys and specialty steel industries.  Examples of furnace systems produced by AMG include vacuum remelting, solar silicon melting and crystallization, vacuum induction melting, vacuum heat treatment and high pressure gas quenching, vacuum precision casting, turbine blade coating and sintering.  AMG also provides vacuum case-hardening heat treatment services on a tolling basis to customers through facilities equipped with vacuum heat treatment furnaces.

 

Timminco Limited is a majority controlled, publicly listed subsidiary of AMG. Timminco is a leader in the production of upgraded metallurgical silicon for the rapidly growing solar photovoltaic energy industry. Timminco also produces silicon metal and magnesium products for use in a broad range of industrial applications.

 

Graphit Kropfmühl AG is a majority controlled, publicly listed subsidiary of AMG.  Based on its secure raw material sources in Africa, China and Europe, Graphit Kropfmühl is a specialist in the production of silicon metal and the extraction, processing and refining of natural crystalline graphite for a wide range of energy saving industrial applications. 

 

AMG operates globally with production facilities in Germany, the United Kingdom, France, Czech Republic, the United States, Canada, Mexico, Brazil, Sri Lanka and Australia and also has sales and customer service offices in Belgium, Russia, China and Japan (website: www.amg-nv.com).

 

 

 

 

 

 

 

 

Certain statements in this press release are not historical facts and are “forward looking”.  Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information.  When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements.  By their very nature, forward looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward looking statements will not be achieved.  These forward looking statements speak only as of the date of this press release.  AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward looking statement is based.