Vancouver, British Columbia, and Montreal, Quebec, Canada, 25 November 2010 -- /CNW Telbec/ -- EACOM Timber Corporation (TSX VENTURE: ETR) today reported that it has entered into a three-year, CAD 50 million revolving credit facility agreement with GE Capital in Canada. The facility will be used to fund working capital and general corporate purposes.
"GE Capital's experience in structuring transactions in the forestry sector was instrumental in identifying a flexible financial structure that would not only answer our immediate needs, but would also support future growth opportunities as we pursue our vision of becoming a global softwood lumber company," said Rick Doman, president and CEO of EACOM Timber Corporation.
Under the terms of the facility, amounts drawn and to be repaid are determined by a borrowing base calculation that fluctuates with eligible receivable and inventory balances (net of reserves). Borrowings can be in Canadian or U.S. dollars. Interest rates on Canadian dollar borrowings are based on either banker's acceptances or the Canadian chartered bank prime rate, at EACOM's choice, plus an applicable margin. That portion of the CAD 0 million commitment that is not drawn will be subject to a stand by fee and upon closing, EACOM was required to pay a closing fee. The facility is secured by a first priority, perfected security interest on all existing and future assets of EACOM. EACOM is subject to customary covenants, including a fixed charge coverage ratio if the amount available for borrowing falls below a certain threshold.
EACOM Timber Corporation is a TSX-V listed company. EACOM owns seven sawmills and an equity interest in an eighth sawmill, all located in eastern Canada, and related tenures. The mills are Timmins, Nairn Centre, Gogama, and Ear Falls in Ontario, and Val-d'Or, Ste-Marie, and Matagami, Quebec. EACOM also owns one idled mill in Big River Saskatchewan. EACOM also owns a remanufacturing facility and a 50% interest in an "I" joist plant.
The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. All directorships are subject to TSX Venture Exchange approval.