Conporec Inc.

Conporec Inc.

February 02, 2007 15:36 ET

Conporec writes off its long-term debts

SOREL-TRACY, QC, Feb. 2 - Conporec Inc. ("Conporec"),
(TSX VENTURE:CNP), announces today that it has reached agreements both with the
Fédération des caisses Desjardins du Québec ("Desjardins") and Investissement
Québec ("IQ") aimed at settling its long-term debts with these institutions.

According to the agreement reached with Desjardins, Desjardins accepts
the amount of $3,750,000 including $ 3,000,000 cash and 3,000,000 common
shares of Conporec at a price of $0.25 per share for a total consideration of
$750,000 as a full and final payment of its secured and non secured long-term
debt amounting to $8,425,463 plus interests until the closing of the

According to the agreement reached with IQ, IQ accepts to receive a total
amount of $1,750,000, including $750,000 cash and the issuance of 4,000,000
common shares of Conporec as a full and final payment of its secured and
unsecured debt amounting to $3,758,695. This agreement is conditional upon the
obtaining of financing by Conporec in the amount of $3,750,000 within 90 days
and the continued operation of the company's facilities in Sorel-Tracy for at
least two years.

These two agreements will enable Conporec to write off long-term debts of
$12,923,025 from its balance sheet and enter a gain-on-loan forgiveness of
about $7,000,000 in return for a payment of $3,750,000, plus accrued interest
up to the completion of the transaction, and the issue of a total of 7,000,000
common shares of its capital stock. Conporec will significantly reduce its
financial expenses in the coming years.

"Writing off these debts is an important milestone in Conporec's growth
plan and will allow it to maintain its organic growth and pursue its
acquisitions projects. This restructured balance sheet places us in an
excellent position to ensure the company's smooth development and the
sustained creation of value for our shareholders, said Mr. Laurier Pedneault,
Chairman of the Board.

The payment of the amounts due and issue of common shares to Desjardins
and IQ must be completed within a maximum of 90 days following the signature
of the agreements. The issue of Conporec's common shares to Desjardins and IQ
remains subject to approval of the TSX Venture Exchange Inc.

Conporec will pay the equivalent of 1.5% of the gain on writing off the
debts under the terms of these agreements as intermediation fees to 9058-6207
Québec Inc., a company wholly owned by Mr. Benoit Côte, as payment of services
rendered in the negotiation of these agreements.

About Conporec

Conporec treats and recycles municipal solid waste through patented
composting and sorting-composting technologies. These processes reduce the
need for landfilling by treating the organic content contained in solid waste,
thus reusing and recycling up to 75% of the original waste mass. In addition,
these technologies help to reduce greenhouse gases typically produced in
landfills. Conporec has successfully operated a plant in Sorel-Tracy, Quebec
and recently delivered its second facility in New York State, United States. A
third facility is currently under construction in France near Paris. Through
Biomax Inc., Conporec has also delivered thirty different composting
facilities that have the capacity to produce more than 300,000 tons of compost
annually. Conporec is a socially responsible organization listed on the TSX
Venture Exchange Inc.

Contact Information

  • Laurier Pedneault, Chairman of the Board of
    Directors, (418) 527-9996; Jean Beaudoin, Chief Executive Officer, (450)