SOURCE: Thomas Equipment Inc.

December 21, 2006 15:36 ET

Pneutech Inc., Rousseau Controls Inc. and Hydramen Fluid Power Limited, Subsidiaries of Thomas Equipment, Inc., Submit a Plan of Arrangement to Their Creditors

Meeting of Creditors to Be Held in Early February 2007

NEW YORK, NY -- (MARKET WIRE) -- December 21, 2006 -- Thomas Equipment, Inc. ("Thomas") (PINKSHEETS: THME) announced that its subsidiary, Pneutech Inc., and Pneutech's subsidiaries Rousseau Controls Inc. and Hydramen Fluid Power Limited, have submitted a plan of arrangement to their creditors under the Companies' Creditors Arrangement Act. A copy of the proposed plan of arrangement has been filed with the Superior Court of Quebec. A meeting of creditors to approve the plan will be held in Montreal on February 2, 2007; if approved, the plan would be submitted to the Superior Court of Quebec for ratification shortly thereafter.

The proposed plan of arrangement provides that secured creditors are to be paid pursuant to existing terms or on terms to be agreed with them. Unsecured creditors will receive the full principal amount of their claims, without interest, with at least half the amount payable shortly after approval of the plan and the balance spread over sixteen quarters. The plan of arrangement is contingent upon two sources of funding: a new credit facility and an investment, which together would provide $6 million in available funds over and above what is required to repay the companies' first-ranking interim lender in full.

The companies have continued to operate throughout the restructuring process, and enjoy strong support from their lenders, suppliers and customers. According to the companies' president, Bernard Jetté, "The filing of the plan of arrangement is an important step toward Pneutech's emergence from the restructuring process. Along with the hiring of new employees and our new prospective sources of funding, the plan of arrangement sends a statement to our customers that Pneutech is on a solid footing and able to fill orders today and in the long term."

About Thomas Equipment, Inc.

Thomas Equipment, Inc. is an innovative and technologically advanced global manufacturer of a full line of skid steer and mini skid steer loaders as well as attachments, mobile screening plants and six models of mini excavators. Thomas distributes its products through a worldwide network of distributors and wholesalers.

Pneutech Inc. (www.pneutech.thomas-equipment.com), established in 1973, and its subsidiaries are engaged in the fluid power industry and specialize in the design engineering, manufacture and distribution of pneumatic and hydraulic systems and components for automation and motion control applications.

Pneutech's customers are primarily in the pulp and paper, aluminum plant, forestry equipment, automotive, oil and gas, heavy equipment, hydraulics, injection molding and power generation industries. The division maintains eight manufacturing and distribution facilities in Canada and has more than two hundred employees in engineering, manufacturing, distribution, sales, service, finance, administration and management.

Safe Harbor Statement Under the Private Securities Litigation Act of 1995 -- With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. The actual future results of THM could differ significantly from those statements. Factors that could cause actual results to differ materially include risks and uncertainties such as the inability to finance the company's operations or expansion, inability to hire and retain qualified personnel, changes in the general economic climate, including rising interest rate and unanticipated events such as terrorist activities. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms, or other comparable terminology. These statements are only predictions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, and such statements should not be regarded as a representation by the Company, or any other person, that such forward-looking statements will be achieved. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on such forward-looking statements. For further risk factors associated with our Company, review our SEC filings.

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