Advanced Fiber Technologies (AFT) Income Fund
TSX : AFT.UN

Advanced Fiber Technologies (AFT) Income Fund

November 14, 2005 18:00 ET

Advanced Fiber Technologies 'AFT' Income Fund Announces Repayment of its Short Term Credit Facility and Corresponding Reduction of Debt

LENNOXVILLE, QUEBEC--(CCNMatthews - Nov. 14, 2005) - Advanced Fiber Technologies (AFT) Income Fund ("AFT") (TSX:AFT.UN) announced developments today with regard to its relations with its lenders.

At the request of its short term lender, the Fund has repaid in full the $2.8 million drawn down under its $4 million Canadian short term credit facility, which was then cancelled by the bank. The repayment was done without affecting operations by using cash on hand, including a cash gain from early terminations of all forward exchange contracts on hand that generated net proceeds of $3.6 million. The resulting additional $0.8 million of cash will supplement the Fund's cash resources available for operations.

Market conditions in the Fund's business remain soft but recent cost reduction initiatives, including the new labour contract recently negotiated for its Lennoxville plant and other production efficiencies, are now taking effect and cash flows from operations continue to be positive. While AFT does not foresee any immediate need for external funds, it has sought and received assurance from certain of its unitholders with significant holdings of units that funds could be made available from them if needed.

The only remaining financial covenants with which the Fund is not in compliance are related to its Senior Secured Notes. The Fund is continuing discussions with its Noteholders. While there has been no acceleration of the repayment of the Senior Secured Notes, the Fund expects to reach an agreement with the Noteholders to use a portion of its excess cash to reduce its long term debt on a sequential basis.

About AFT

Advanced Fiber Technologies (AFT) Income Fund is a limited purpose trust established to hold the securities of Advanced Fiber Technologies (AFT) Trust. AFT is one of the oldest and largest producers of pulp screening components, having celebrated its 100th year of operations in March 2003. AFT's product portfolio is comprised of three distinct but complementary technologies: pulp screening, pulp refining and pulp dewatering. Pulp screening components are used to separate contaminants from pulp, a process that is critical to ensuring the quality of the pulp and the quality of the resulting paper products. Pulp refining is adjacent to the pulp screening process and is mostly used to enhance pulp properties. Dewatering is a process used to thicken pulp or to increase consistency of sludge before disposal.

Forward-looking Information

The statements contained in this news release that are forward-looking are based on current expectations, and are subject to a number of uncertainties and risks, and actual results may differ materially. These uncertainties and risks include, but are not limited to: the dependence on certain key suppliers, competitive pressures and changes in market activity, risks associated with international operations and foreign exchange, legal proceedings, environmental, health and safety and other regulatory requirements. Further information can be found in the disclosure documents filed by Advanced Fiber Technologies (AFT) Income Fund with the securities regulatory authorities, available at www.sedar.com.

Contact Information

  • Advanced Fiber Technologies (AFT) Income Fund
    Normand Potvin
    Chief Financial Officer & Secretary
    (819) 562-4754