Empire Industries Ltd.
TSX VENTURE : EIL

Empire Industries Ltd.

January 27, 2011 07:00 ET

Empire Industries Announces Further Developments for Private Placement and Convertible Debenture Financings

WINNIPEG, MANITOBA--(Marketwire - Jan. 27, 2011) -

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Empire Industries Ltd. ("Empire" or the "Company") (TSX VENTURE:EIL) announces that it has received conditional approvals from the TSX Venture Exchange with respect to its previously announced non-brokered private placement and issue of convertible debentures, subject to some minor revisions as outlined below.

Private Placement - The Company will issue up to 40 million Units at a price of $0.05 per Unit for gross proceeds of up to $2.0 million with each Unit consisting of one common share and one-half of one warrant. Each whole warrant will entitle the holder to purchase one additional common share at a price of $0.10 per share for a period of two years from the date of closing of the offering. The Company anticipates closing the Private Placement on or before February 14, 2011.

Convertible Debentures – The Company also advises that it is proceeding with the issue of up to $2,500,000 of Secured Subordinated Convertible Debentures which will have an annual coupon of 10% and a term of 5 years. The Debentures will initially be convertible at $0.10 per common share, however, in the event the Company obtains shareholder approval for a share consolidation, the conversion price can be lowered to $0.065 on a pre-consolidation basis. The Company is planning to seek approval for the consolidation at the next shareholder meeting scheduled for Spring, 2011. Subject to the ability to patriate funds to Canada by February 14, 2011, Qiguang Guandong Steel Structures Ltd. ("Qiguang") has agreed to purchase $450,000 of the Private Placement and up to $1.05 million of the Debentures. Qiguang is unable to convert any Debentures purchased until such time as the TSX Venture Exchange has approved Qiguang as an Insider of Empire. To the extent that Qiguang is prevented from honouring its commitment within the regulatory timelines due to Chinese or Canadian regulatory issues, Empire will use its best efforts to find alternative buyers for the Units and Debentures.

About Empire Industries

Empire Industries is based primarily in western Canada and operates in two market segments: Specialized Engineered Product Manufacturing and Steel Fabrication. It also participates in a strategic partnership in the industrial maintenance services sector through its equity stake in ACE Industrial Services, based in Fort McMurray. The Company's business operations are focused on the infrastructure, commercial and industrial construction marketplace of western Canada and select niche export markets internationally. Empire's common shares are listed on the TSX Venture Exchange under the symbol EIL.

For more information about the Company, visit www.empind.com.

Reader Advisory

This news release contains forward-looking statements, within the meaning of applicable securities legislation, concerning Empire's business and affairs. In certain cases, forward-looking statements can be identified by the use of words such as "plans'', "expects'' or "does not expect'', "budget'', "scheduled'', "estimates'', "forecasts'', "intends'', "anticipates'' or variations of such words and phrases or state that certain actions, events or results "may'', "could'', "would'', "might'' or "will be taken'', "occur'' or "be achieved''. These forward looking statements are based on current expectations, and are naturally subject to uncertainty and changes in circumstances that may cause actual results to differ materially. Readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking information is provided as of the date of this press release, and Empire assumes no obligation to update or revise them to reflect new events or circumstances, except as may be required under applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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