Forest & Marine Financial Limited Partnership

Forest & Marine Investments Ltd.
TSX VENTURE : FME

Forest & Marine Investments Ltd.
Forest & Marine Investment Trust

March 17, 2009 19:46 ET

Forest & Marine Investments Ltd.: Expiry of Forbearance and Demand Made Under Credit Facility by Secured Creditor

NANAIMO, BRITISH COLUMBIA--(Marketwire - March 17, 2009) - Forest & Marine Investments Ltd. (TSX VENTURE:FME) -

The Partnership announces that the forbearance agreement dated April 25, 2005 (the "Forbearance Agreement") with CIT Business Credit Canada Inc. ("CIT"), as extended by subsequent extensions to March 15, 2009 has expired. Under the Forbearance Agreement, CIT had agreed to continue to provide the Partnership access to the credit facilities under the financing agreement entered into between CIT and the Partnership on June 18, 2004 (the "Financing Agreement"), and to forbear, provided that no new default occurred, from exercising its acceleration and enforcement remedies under the Financing Agreement and related loan documents.

On March 12, 2009, just days before the Forbearance Agreement expired, CIT advised the Partnership that it had assigned all of its rights under the Financing Agreement to Asset Engineering Limited Partnership ("Asset Engineering"). Asset Engineering has made a formal demand for repayment of the outstanding balance of approximately $13.3 million owing under the Financing Agreement and has given notice to the Partnership, the Company and certain other entities under the Forest & Marine umbrella (the "F&M Debtors") that it will enforce the security granted under the Financing Agreement if the outstanding balance is not repaid by March 27, 2009. The Partnership is currently in negotiations with Asset Engineering and unless suitable forbearance or refinancing arrangements are concluded prior to March 27, 2009, the F&M Debtors intend to file for creditor protection under the Companies' Creditors Arrangement Act and Business Corporations Act (British Columbia).

The Partnership, the Company and the Trust have ceased distributing securities under the prospectus dated May 29, 2008 as the distribution under the prospectus was required to cease as a result of the expiry of the Forbearance Agreement.

Additionally, given the situation, the Partnership has determined that it must temporarily suspend the right of redemption of all Partnership Units and must rely on its contractual right to postpone repayment of Investment Receipts for 30 days after demand for payment.

About the Forest & Marine Group

The Forest & Marine Group of companies includes the Partnership, Forest & Marine Financial Corporation as general partner of the Partnership, the Company, the Trust, Forest & Marine Capital Ltd., Forest & Marine Insurance Services Ltd., Treesea Holdings Inc., and Staffordshire Trust Company (collectively, the "Forest & Marine Financial Group").

Through the Partnership, the Forest & Marine Financial Group is engaged primarily in the financing of heavy mobile equipment, helicopters, tugs and barges utilized in the forest products and marine industries, as well as other non-forestry related businesses such as supermarkets and food distribution, feeder airlines, commercial fishing and processing and wholesale glass distributors. All business is conducted by the Partnership.

The Forest and Marine Financial Group has extensive knowledge of the forestry and marine industries; its primary focus is to provide funding to independent logging contractors and marine operators. The Forest and Marine Financial Group's geographic target markets are communities on Vancouver Island, the Queen Charlottes and throughout coastal British Columbia. The Forest and Marine Financial Group has provided specialized credit facilities for this niche market since 1983.

ON BEHALF OF:

FOREST & MARINE FINANCIAL LIMITED PARTNERSHIP (the "Partnership")

by its General Partner, Forest & Marine Financial Corporation

David R. Hitchcock, Director

FOREST & MARINE INVESTMENTS LTD. (the "Company")

David R. Hitchcock, Director

FOREST & MARINE INVESTMENT TRUST (the "Trust")

by its Manager, Forest & Marine Financial Corporation

David R. Hitchcock, Director

Neither 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.

Contact Information

  • Forest & Marine Investments Ltd.
    David R. Hitchcock
    Director
    (250) 753-0141 or Toll Free: 1-877-772-0022
    (250) 753-0173 (FAX)