Advanced Fiber Technologies (AFT) Income Fund
TSX : AFT.UN

Advanced Fiber Technologies (AFT) Income Fund

May 12, 2005 17:44 ET

Advanced Fiber Technologies (AFT) Income Fund Announces Temporary Suspension of Distributions

LENNOXVILLE, QUEBEC--(CCNMatthews - May 12, 2005) - Advanced Fiber Technologies (AFT) Income Fund (TSX:AFT.UN) announced today that it will temporarily suspend its monthly cash distributions.

When reporting earlier on its first quarter results, the Fund indicated that the pulp and paper industry was slowing down in all regions and that margins were under pressure. Results for the current quarter show that this trend is continuing. The Board of Trustees has therefore decided to conserve funds in order to reduce debt levels as well as the likelihood that debt covenants would be breached if current trends continue in the balance of the year. In addition, the Fund needs to be ready to finance the purchase of the Finebar® business should it decide or be required to do so later this year under the existing option and put arrangements.

"The Fund's business continues to generate good cash flow but the level of debt needs to be adjusted in line with the new business environment for the benefit of the Unitholders over the long term. In the meantime, we will continue to pursue our cost containment, productivity, design and marketing initiatives, as we grow sales from our complementary Optimum and Finebar® product lines," commented Mr. Roch Leblanc, CEO of the Fund.

Advanced Fiber Technologies (AFT) Income Fund is a limited purpose trust established to hold the securities of Advanced Fiber Technologies (AFT) Trust. AFT is one of the oldest and largest producers of pulp screening components, having celebrated its 100th year of operations in March 2003. AFT's product portfolio is now comprised of three distinct complementary technologies: pulp screening, pulp refining and pulp dewatering. Pulp screening components are used to remove contaminants from pulp, a process that is critical to ensuring the quality of the pulp and the quality of the resulting paper products. Pulp refining is adjacent to the pulp screening process and is mostly used to enhance pulp properties. Dewatering is a process used to thicken pulp or to increase consistency of sludge before disposal.

The statements contained in this news release that are forward-looking are based on current expectations, and are subject to a number of uncertainties and risks, and actual results may differ materially. These uncertainties and risks include, but are not limited to: the dependence on certain key suppliers, competitive pressures and changes in market activity, risks associated with international operations and foreign exchange, legal proceedings, environmental, health and safety and other regulatory requirements. Further information can be found in the disclosure documents filed by Advanced Fiber Technologies (AFT) Income Fund with the securities regulatory authorities, available at http://www.sedar.com.

Contact Information

  • Advanced Fiber Technologies (AFT) Income Fund
    Normand Potvin
    Chief Financial Officer
    (819) 562-4754