Brookfield Asset Management Inc.

Brookfield Asset Management Inc.

August 08, 2008 16:40 ET

Tricap Announces Early Warning Update for Birch Mountain Resources

CALGARY, ALBERTA--(Marketwire - Aug. 8, 2008) - Brookfield Asset Management Inc. (TSX:BAM)(NYSE:BAM)(AEX:BAMA) -

Pursuant to the early warning requirements of applicable Canadian securities laws, Tricap Partners Ltd. ("Tricap") wishes to update its previous early warning report dated December 24, 2007 filed in respect of Birch Mountain Resources Ltd. (the "Corporation").

On December 21, 2007, Tricap announced it had subscribed for a convertible debenture in the principal amount of $31,500,000 (the "Debenture") issued by the Corporation. The Debenture was originally acquired for investment purposes and in connection with refinancing of a prior credit facility that had been extended to the Corporation by an affiliate lender of Tricap.

On May 30, 2008, the Corporation's shareholders approved the terms of the Debenture, including the anti-dilution adjustment provisions and conversion provisions. Consequently, the stock exchange requirements applicable to the Corporation would no longer limit the issuance of Common Shares to Tricap upon conversion of the Debenture to 20% or less of the outstanding Common Shares.

On June 23, 2008, Tricap issued a notice of a default to the Corporation with respect to financial covenant non-compliance by the Corporation under a loan agreement between of Tricap and the Corporation dated December 21, 2007 (the "Loan Agreement"). As the default remained uncured, it became an event of default on July 3, 2008. As of July 23, 2008, Tricap has the ability to convert the Debenture into Common Shares due to the passage of an additional 20 days without the Corporation having cured the event of default.

On July 23, 2008, the Corporation publicly announced that a special committee of its independent directors and board of directors determined that it was imperative to pursue an immediate sale of the Corporation to unlock maximum value for its shareholders. The Corporation also announced that in the event an immediate sales process does not achieve an acceptable price, the Corporation intends to work with its stakeholders to recapitalize the balance sheet to improve liquidity and permit delivery of the business plan.

Tricap is in discussions with the management and directors of the Corporation and its financial advisors regarding the event of default under the Debenture and the Loan Agreement.

For additional information, or for a copy of the early warning report filed in respect of the above transaction, please contact:

Jim Reid
Tricap Partners Ltd.
Suite 1700, 335-8th Avenue SW
Calgary Alberta T2P 1C9
tel: (403) 770-7220

Tricap Partners Ltd. was established by Brookfield Asset Management to provide a source of patient, long-term capital and strategic assistance to mid-market companies based in North America. With strong industry and financial management expertise, Tricap is well positioned to assist companies in building value over the long term.

NOTE: This press release contains forward-looking information and other "forward-looking statements" within the meaning of certain securities laws including Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995 and in any applicable Canadian securities regulations. The words "will" and "expected" and other expressions which are predictions of or indicate future events, trends or prospects and which do not relate to historical matters identify forward-looking statements. Although Tricap believes that the anticipated actions expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors which may cause the actual outcome to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information. Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include: economic and financial conditions; the behaviour of financial markets including fluctuations in interest and exchange rates. We caution that the foregoing list of important factors that may affect future results is not exhaustive. The company undertakes no obligation to publicly update or revise any forward-looking statements or information, whether written or oral, that may be as a result of new information, future events or otherwise.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this news release.

Contact Information

  • Tricap Partners Ltd.
    Jim Reid
    (403) 770-7220