MTI Global Inc.

MTI Global Inc.

December 07, 2007 16:25 ET

MTI Global Provides Update on Financial Covenant

MISSISSAUGA, ONTARIO--(Marketwire - Dec. 7, 2007) - MTI Global Inc. ('MTI') (TSX:MTI) today reported that it has entered into a forbearance agreement with its principal lender, a Canadian chartered bank (the "Bank"). Under the agreement, the Bank has agreed not to enforce its security prior to March 31, 2008 subject to MTI satisfying certain conditions. In addition certain provisions of the credit facilities have been amended. As reported on November 14, 2007, MTI was notified by the Bank that it was in breach of a financial covenant in its credit facility agreement and in the transfer of assets and financial support of MTI de Baja as at June 30, 2007 and September 30, 2007.

The conditions to the forbearance include, among others, that guarantees and additional security be provided by MTI Groendyk and MTI Specialty Silicones (MTI Groendyk's assets were not previously held by the Bank as security); that MTI provide certain additional financial information to the Bank; and that MTI meet certain agreed upon deliverables at various dates up to and including March 31, 2008.

The amendments to the credit facilities include that a $3.0 million term facility is now, as previously disclosed, classified as a current portion of long term debt and therefore repayable upon demand (the term facility is related to the acquisition of the silicone division of Mold-Ex on July 12, 2007); that interest on the operating facility is now payable at prime plus 2% and on the term facility at prime plus 2.5%; and that MTI comply with certain additional financial reporting and general covenants on an on-going basis.

MTI is developing a long term plan, which will include a review of financial, corporate and operational structures to stabilize its financial situation. In the shorter term, MTI will continue to focus specifically on improving and streamlining customer and sales relationships; implementing more stringent discipline with respect to processes; and tighter management of working capital including inventory and overall financial performance. The restructuring plan is to be submitted to the Bank on or before January 21, 2008.

About MTI Global:

MTI Global Inc. (TSX:MTI) designs, develops and manufactures custom-engineered products using silicone and other cellular materials. The Company serves a variety of specialty markets focused on three main product categories: Silicone, Aerospace and Fabricated Products. MTI's manufacturing divisions develop and produce silicone foam using patented technology. The Company designs and fabricates energy management systems from a variety of flexible, cellular materials. MTI also produces and distributes specialty silicone elastomer products. MTI's primary markets are aerospace and mass transit. Secondary markets include sporting goods, automotive, industrial, institutional, electronics, and the medical market through a 51% interest in MTI Sterne SARL of Cavaillon, France. MTI's head office and Canadian manufacturing operations are located in Mississauga, Ontario, with international manufacturing operations located in Richmond and Buchanan, Virginia; Pensacola, Florida; Bremen, Germany; and a contract manufacturer venture in Ensenada, Mexico. The Company also has sales operations in England and Sweden, and an engineering support centre in Brazil. The Company's website is

Contact Information

  • MTI Global Inc.
    Bill Neill
    President and Chief Executive Officer
    (905) 564-9700
    (905) 564-8886 (FAX)