November 01, 2007 09:00 ET

Granby Industries Income Fund Provides Information Update and Appointment of Special Committee

GRANBY, QUEBEC--(Marketwire - Nov. 1, 2007) - Granby Industries Income Fund (TSX:GBY.UN) (the "Fund") announced today that Clarke Inc. ("Clarke') has advised the Fund that it has taken an assignment of a $15.75 million term loan provided to Granby Industries Limited Partnership ("Granby" or "Granby LP"). by two Canadian chartered banks. The Fund holds an eighty per cent (80%) interest in Granby. In connection with the assignment of the term loan, the Fund understands that Clarke has also agreed to provide an unconditional guarantee of Granby's $9.0 million revolving credit facility and expressed its desire to refinance Granby's credit facilities.

"We are pleased that Clarke has demonstrated their confidence in Granby" said Pierre Fournier, President of Granby. "We believe this commitment of financial support is significant".

The Board of Trustees of the Fund also announced today the establishment of an independent committee to oversee the renegotiation process with Clarke and to consider other financing alternatives available to the Fund. The independent committee consists of Mr. Eric Berke, Mr. Kenneth Chalmers and Mr. James Westaway.

As previously reported, notwithstanding the assignment to Clarke, Granby continues to be in breach of certain covenants under its credit facilities. Granby intends to renegotiate the terms of its credit facility with Clarke or seek alternative financing prior to the maturity of the existing credit facility on January 31, 2008. There can be no assurance that Granby will be able to do so at all or on favourable terms. A failure to comply with the obligations in the credit facilities could result in the acceleration of the relevant indebtedness under the credit facilities, in which case there can be no assurance that the assets of Granby would be sufficient to repay in full that indebtedness. In addition, the ability of Granby to continue as a going concern and to realize the carrying value of its assets and discharge its liabilities when due is dependent on the successful completion of the actions taken or planned relating to the breach of certain covenants under its credit facilities.

About Granby Industries Income Fund

Granby Industries is a leading North American manufacturer of high quality tanks for the residential and light commercial storage of heating oil and other petroleum-based products and is also a leading manufacturer of coated copper tubing. Granby has been operating in the heating oil storage tank industry for more than 50 years and its primary business is manufacturing replacement residential tanks. Granby Industries has operations in Granby, Quebec and Oakville, Ontario.

Forward-looking information is based on certain factors and assumptions regarding, among other things, expected storage tank unit volumes, the price of raw materials and the average US/Canadian dollar exchange rate during the year. While Granby considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward-looking information is subject to certain factors, including risks and uncertainties, which could cause actual results to differ materially from what we currently expect. These factors are described in the Fund's Annual Information Form available on and include, among other things, leverage and restrictive covenants, economic conditions, the seasonality of demand for Granby's products, the risk of increased heating oil costs, which could depress demand for heating oil storage tanks, commodity pricing volatility and foreign exchange risk, regulatory change, interest rate fluctuation, a decline in the housing and major consumer products markets, dependence on key suppliers, reliance on major customers and the risk of increased competition in the coated copper tubing market and the storage tank market.

You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While Granby may elect to, it is under no obligation and does not undertake to update this information at any particular time, except as required by law.

Contact Information

  • Granby Industries Income Fund
    Mr. Paul Antoniadis, CA
    Vice President, Finance & CFO
    450-378-2334 ext. 225