Timminco Limited

Timminco Limited

March 24, 2010 08:05 ET

Timminco Converts Repayment Liability into Equity

TORONTO, ONTARIO--(Marketwire - March 24, 2010) - Timminco Limited ("Timminco") (TSX:TIM) announced today it has agreed with Q-Cells SE ("Q-Cells"), a solar grade silicon customer of Timminco's wholly-owned subsidiary Bécancour Silicon Inc. ("Bécancour"), to issue approximately 15.9 million common shares of Timminco as full and final settlement of substantially all of the outstanding liability of approximately €9.7 million currently due to Q-Cells under the repayment schedule agreed upon in May 2009 (the "Repayment Liability"). Upon completion of the issuance of the common shares, which represent just under 10% of Timminco's current issued and outstanding shares, the balance of the Repayment Liability will be approximately €0.5 million. Timminco has also agreed with Q-Cells that this amount will be fully repaid in cash during 2010.

The Repayment Liability originally resulted from the settlement of claims in May 2009 relating to the termination of long-term supply contracts signed with Q-Cells in 2008, including repayment of approximately €8.8 million of the outstanding deposits received by Bécancour at that time and which were repayable upon termination of those contracts. Under the terms of the Repayment Liability, Bécancour was required to repay the principal and accrued interest on such deposits in quarterly installments throughout 2010 and to pay interest at 12% on a monthly basis on the outstanding amount. No cash payments have been made to date in respect of the Repayment Liability.

The issuance of the common shares to Q-Cells, which is on a private placement basis at a price of $0.80 per share, is subject to receipt of all necessary regulatory approvals, including approval of the Toronto Stock Exchange. The closing of the transaction is expected to occur on or about March 26, 2010. All common shares issued to Q-Cells will be subject to a four-month hold period, effective from the date of issuance.

The remaining cash repayment will be evidenced by a promissory note issued to Q-Cells in the amount of €525,000. The note will be a direct, unsecured obligation of Timminco, payable in nine equal monthly installments starting April 30, 2010 with the final payment due on December 31, 2010.

About Timminco

Timminco produces silicon metal for the chemical (silicones), aluminum and electronic / solar industries. Timminco also produces solar grade silicon, using its proprietary technology for purifying silicon metal, for the solar photovoltaic energy industry.

Cautionary Notes

This news release contains "forward-looking information", as such term is defined in applicable Canadian securities legislation, concerning Timminco's future financial or operating performance and other statements that express management's expectations or estimates of future developments, circumstances or results. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "expects", "believes", "anticipates", "budget", "scheduled", "estimates", "forecasts", "intends", "plans" and variations of such words and phrases, or by statements that certain actions, events or results "may", "will", "could", "would" or "might" "be taken", "occur" or "be achieved". In this news release, such information includes statements regarding the Repayment Liability, and the issuance of Timminco common shares and the Note. Forward-looking information is based on a number of assumptions and estimates that, while considered reasonable by management based on the business and markets in which Timminco operates, are inherently subject to significant operational, economic and competitive uncertainties and contingencies. Timminco cautions that forward-looking information involves known and unknown risks, uncertainties and other factors that may cause Timminco's actual results, performance or achievements to be materially different from those expressed or implied by such information, including, but not limited to: liquidity risk; global economic uncertainty; credit risk; pricing and availability of raw materials; silicon metal selling prices; customer concentration; power supply and electricity prices; production interruptions; transportation disruptions; limited history with solar grade silicon; solar grade silicon selling prices; customer commitments for solar grade silicon; solar grade silicon production costs; quality of solar grade silicon; producing ingots with Timminco's solar grade silicon; protection of intellectual property rights; expansion of solar grade silicon production capacity; class action lawsuits; closure of former magnesium facilities; foreign exchange; investment in Applied Magnesium; interest rate risk; financing for capital expenditures; environmental liabilities; relationships with AMG; dependence upon key executives and employees; completion and integration of potential acquisitions, partnerships or joint ventures; risks with foreign operations and suppliers; environmental, health and safety laws and liabilities; intellectual property infringement claims; new regulatory requirements; labour disputes; and changes in tax laws. These factors are discussed in greater detail in Timminco's Annual Information Form for the year ended December 31, 2008, and in Timminco's most recent Management's Discussion and Analysis, each of which is available via the SEDAR website at www.sedar.com. Although Timminco has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in forward-looking information, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information in this news release is made as of the date of this news release and Timminco disclaims any intention or obligation to update or revise such information, except as required by applicable law.

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Contact Information

  • Timminco Limited
    Robert Dietrich
    Executive Vice President - Finance and CFO
    (416) 364-5171
    (416) 364-3451 (FAX)
    The Equicom Group Inc.
    Lawrence Chamberlain
    (416) 815-0700 ext. 257
    (416) 815-0080 (FAX)