Timminco: Update on Credit Facility
Timminco Limited announced that its senior secured lender has agreed to eliminate the requirement for an additional US$5 million of minimum availability reserve that would have become effective as of March 1, 2010.
Under the Credit Agreement dated April 15, 2005, as amended, with Bank of America, N.A., Timminco is able to access funds up to the amount of the availability under the revolving credit facility. Availability is equal to (i) the lesser of the borrowing base and the revolving credit commitment under the revolving credit facility, minus (ii) the sum of the amounts borrowed under such facility, and the minimum availability reserve. In the fourth quarter of 2009, the Credit Agreement was amended to increase the minimum availability reserve from US$2 million to US$7 million, effective for the 45 day period from February 1 to March 17, 2010. At the end of January, this period was postponed by one month. The current amendment eliminates this additional requirement entirely, such that the minimum availability reserve will remain at its current level of US$2 million.
Timminco produces silicon metal for the chemical (silicones), aluminum and electronic / solar industries. Timminco also produces solar grade silicon, using its proprietary technology for purifying silicon metal, for the solar photovoltaic energy industry.
This news release contains "forward-looking information", as such term is defined in applicable Canadian securities legislation, concerning Timminco's future financial or operating performance and other statements that express management's expectations or estimates of future developments, circumstances or results. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "expects", "believes", "anticipates", "budget", "scheduled", "estimates", "forecasts", "intends", "plans" and variations of such words and phrases, or by statements that certain actions, events or results "may", "will", "could", "would" or "might" "be taken", "occur" or "be achieved". In this news release, such information includes statements regarding availability under the revolving credit facility. Forward-looking information is based on a number of assumptions and estimates that, while considered reasonable by management based on the business and markets in which Timminco operates, are inherently subject to significant operational, economic and competitive uncertainties and contingencies. Timminco cautions that forward-looking information involves known and unknown risks, uncertainties and other factors that may cause Timminco's actual results, performance or achievements to be materially different from those expressed or implied by such information, including, but not limited to: liquidity risk; global economic uncertainty; credit risk; pricing and availability of raw materials; silicon metal selling prices; customer concentration; power supply and electricity prices; production interruptions; transportation disruptions; limited history with solar grade silicon; solar grade silicon selling prices; customer commitments for solar grade silicon; solar grade silicon production costs; quality of solar grade silicon; producing ingots with Timminco's solar grade silicon; protection of intellectual property rights; expansion of solar grade silicon production capacity; class action lawsuits; closure of former magnesium facilities; foreign exchange; investment in Applied Magnesium; interest rate risk; financing for capital expenditures; environmental liabilities; relationships with AMG; dependence upon key executives and employees; completion and integration of potential acquisitions, partnerships or joint ventures; risks with foreign operations and suppliers; environmental, health and safety laws and liabilities; intellectual property infringement claims; new regulatory requirements; labour disputes; and changes in tax laws. These factors are discussed in greater detail in Timminco's Annual Information Form for the year ended December 31, 2008, and in Timminco's most recent Management's Discussion and Analysis, each of which is available via the SEDAR website at www.sedar.com. Although Timminco has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in forward-looking information, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. Accordingly, readers should not place undue reliance on forward-looking information. The forward- looking information in this news release is made as of the date of this news release and Timminco disclaims any intention or obligation to update or revise such information, except as required by applicable law.
Executive Vice President - Finance and CFO
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