West Street Capital Corporation
TSX VENTURE : WSC
TSX VENTURE : WSC.PR.A

West Street Capital Corporation

August 28, 2009 17:12 ET

West Street Announces Second Quarter Results and Proposed Acqusition of Remaining Preferred Shares

TORONTO, ONTARIO--(Marketwire - Aug. 28, 2009) - West Street Capital Corporation ("West Street" or the "company") (TSX VENTURE:WSC)(TSX VENTURE:WSC.PR.A) reported a net loss for the three months ended June 30, 2009 of $0.2 million, compared with net income of $0.4 million reported during the same period in 2008. The decrease in income is due to lower interest rates on the company's securities and cash portfolio as well as foreign exchange losses that arose on a security disposition during the quarter. After providing for unpaid preferred share dividend obligations of $0.7 million that accumulated during three month period, the net loss was $0.09 per common share, compared to a net loss of $0.03 per common share during the three months ended June 30, 2008.

The company classifies investments within its securities portfolio as available-for-sale financial instruments and accordingly records changes in the market value of these investments in other comprehensive income. During the three months ended June 30, 2009, unrealized gains recorded in other comprehensive income were $3.0 million after tax, compared with losses of $0.4 million in the same period in the prior year. As a result, the net book value attributed to the preferred shares increased to $45.2 million or $26.92 per preferred share compared to $42.4 million or $25.25 per preferred shares at December 31, 2008.

Update on offer to purchase Preferred Shares

During the quarter, the company's major shareholder, Brookfield Asset Management Inc., ("Brookfield"), offered to purchase any Class E Preferred Shares, Series 1 of the company (the "Preferred Shares") that Brookfield did not currently own at a price of $37.50 for each Preferred Share. Subsequent to June 30, 2009, Brookfield announced that 103,117 Class E Preferred Shares had been tendered to the offer, representing 86.5% of the Preferred Shares not already held by Brookfield, increasing Brookfield's ownership of the Preferred Shares to approximately 99%. Brookfield intends to acquire all of the remaining Preferred Shares by means of an amalgamation and, upon completion, it is expected that the Preferred Shares will be de-listed from the TSX Venture Exchange.



Statements of Operations

----------------------------------------------------------------------------
(unaudited) Three months ended Six months ended
$thousands, except per June 30 June 30
share amounts 2009 2008 2009 2008
----------------------------------------------------------------------------

Investment income $ 412 $ 669 $ 933 $ 1,359
Operating and legal
expenses (72) (70) (107) (95)
----------------------------------------------------------------------------
Net income before investment
losses and taxes 340 599 826 1,264
Investment losses (393) - (393) -
----------------------------------------------------------------------------
Net (loss) income before tax (53) 599 433 1,264
Current tax expense (149) (155) (255) (381)
Future tax expense - (52) - (137)
----------------------------------------------------------------------------
Net (loss) income $ (202) $ 392 $ 178 $ 746
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net loss per common share $ (0.09) $ (0.03) $ (0.12) $ (0.06)
----------------------------------------------------------------------------
----------------------------------------------------------------------------



Balance Sheets
----------------------------------------------------------------------------
(unaudited)
$thousands, except per share amounts June 30, 2009 December 31, 2008
----------------------------------------------------------------------------

Assets
Cash and equivalents $ 17,809 $ 16,805
Securities 24,560 25,392
Interest receivable and other 3,068 235
----------------------------------------------------------------------------
$ 45,437 $ 42,432
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities
Accounts payable and provisions $ 249 $ 58
Shareholders' equity(1) 45,188 42,374
----------------------------------------------------------------------------
$ 45,437 $ 42,432
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to each Class E Preferred
Share, Series 1(1) $ 26.92 $ 25.25
----------------------------------------------------------------------------
----------------------------------------------------------------------------

1) Shareholders' Equity
----------------------------------------------------------------------------
June 30 Per Preferred
$thousands, except per share amounts 2009 Share
----------------------------------------------------------------------------
Shareholders' equity $ 45,188 $ 26.92
----------------------------------------------------------------------------

Less amounts attributed to preferred
shares
Redemption value 41,887 24.96
Unaccrued dividends in arrears 52,026 30.99
----------------------------------------------------------------------------
93,913 55.95
----------------------------------------------------------------------------
Common share deficit $ (48,725) $ (29.03)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

As a result of cumulative dividends in arrears, the tangible net book value
of the company currently accrues entirely to the preferred shares. Based on
1,678,465 preferred shares currently issued and outstanding.


Note: This news release contains "forward-looking information" within the meaning of Canadian provincial securities laws and regulations, the words "intends", "expected" and other expressions that are predictions of or indicate future events, trends or prospects and which do not relate to historical matters identifying forward-looking information. Expressions of future or conditional verbs such as "will" are predictions of or indicate future events, trends or prospects and which do not relate to historical matters or identify forward-looking information. Forward-looking information in this news release includes statements with regard to the company's major shareholder's intention to acquire all Preferred Shares of the company that it does not currently own by means of an amalgamation and the expected de-listing of the Preferred Shares from the TSX Venture Exchange.

Although the company believes that the anticipated future results or achievements expressed or implied by the forward-looking information and statements are based upon reasonable assumptions and expectations, the reader should not place undue reliance on the forward-looking information and statements because they involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking information and statements.

Factors that could cause actual results to differ materially from those contemplated or implied by the forward-looking information and statements include: the behavior of financial markets, including fluctuations in interest and exchange rates, availability of equity and debt financing and other risks and factors detailed from time to time in the company's other documents filed with the Canadian securities regulators.

We caution that the foregoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking information to make decisions with respect to the company, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as may be required by law, the company undertakes no obligation to publicly update or revise any forward-looking information or statements, whether written or oral, that may be as a result of new information, future events or otherwise.

Contact Information

  • West Street Capital Corporation
    Brian D. Lawson
    President
    (416) 359-8625