Arctic Glacier Income Fund
TSX : AG.UN

Arctic Glacier Income Fund

July 14, 2011 17:09 ET

Arctic Glacier in Discussions with Lenders

WINNIPEG, MANITOBA--(Marketwire - July 14, 2011) - Arctic Glacier Income Fund (TSX:AG.UN) ("the Fund") today announced its subsidiary, Arctic Glacier Inc. ("Arctic Glacier"), is in discussions with its lenders to amend certain terms of its credit agreements.

The discussions principally aim to revise financial covenants with which Arctic Glacier must comply under the terms of its credit agreements, including those governing maximum leverage ratio, interest coverage ratio, fixed charge coverage ratio and minimum EBITDA levels.

Arctic Glacier's sales and EBITDA (earnings before interest and finance costs, income taxes, depreciation and amortization) for the second quarter of 2011 have been negatively impacted by poor weather in most of Arctic Glacier's markets. As a result, it is expected that the second quarter results, once they have been finalized, will show the Fund will not be in compliance with certain of its financial covenants for this period and this is, in the absence of amendment to its credit agreements, a default under the terms of the agreements.

If the requested amendments to the credit agreements are not made and those defaults are not cured or waived, the lenders under either or both of the credit agreements may elect to accelerate the outstanding amounts owed to them. The credit agreements provide first and second charge security interests on all of Arctic Glacier's assets in favour of those lenders. Indebtedness under the Fund's outstanding convertible debentures is subordinated to amounts owing under these credit agreements.

The amendments under consideration, if approved by Arctic Glacier's lenders, will enable the Fund to continue evaluating alternatives as part of the strategic and financing review that is currently in progress.

Based upon the Fund's anticipated second quarter financial results, and in the absence of amendments to its credit agreements, the Fund projects that Arctic Glacier will be unable to comply with certain of its covenants in future quarters. Accordingly, additional amendments to Arctic Glacier's credit agreements may be required in the future. The Fund will maintain an ongoing dialogue with its lenders in this regard although there can be no assurance that such amendments will be approved.

About Arctic Glacier

Arctic Glacier Income Fund, through its operating company, Arctic Glacier Inc., is a leading producer, marketer and distributor of high-quality packaged ice in North America, primarily under the brand name of Arctic Glacier® Premium Ice. Arctic Glacier operates 39 production plants and 48 distribution facilities across Canada and the northeast, central and western United States servicing more than 75,000 retail locations.

Arctic Glacier Income Fund trust units are listed on the Toronto Stock Exchange under the trading symbol AG.UN. There are 39.0 million trust units outstanding.

Forward-Looking Information

This news release contains forward-looking statements, which are subject to certain risks, uncertainties and assumptions. A number of factors could cause actual results to differ materially from the results discussed in these forward-looking statements including those discussed under the heading "Risk Factors" and elsewhere in the Fund's Annual Information Form and other publicly available disclosure documents, as filed on SEDAR (www.sedar.com). There is no assurance that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as at the date of this news release, and the Fund assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances.

The Toronto Stock Exchange does not approve or disapprove of the adequacy or accuracy of this release.

Contact Information

  • Arctic Glacier Income Fund
    Keith McMahon
    President & CEO
    Toll free investor relations phone: 1-888-573-9237

    Arctic Glacier Income Fund
    Doug Bailey
    Chief Financial Officer
    Toll free investor relations phone: 1-888-573-9237
    www.arcticglacier.com