Velan Inc.
TSX : VLN

Velan Inc.

June 30, 2008 14:30 ET

Velan Inc. Announces Proposed Sale of Its Jointly Held Italian Company

MONTREAL, QUEBEC--(Marketwire - June 30, 2008) - Velan Inc. (TSX:VLN) announced that it has entered into a definitive agreement with BPS S.r.l. ("BPS") for the sale of its 50% interest in Velan S.r.l. ("SRL"). The sale is subject to customary closing conditions including the securing of financing.

BPS has agreed to pay $44,068,293 (27,650,000 Euros) and it is anticipated that the sale will close by July 31, 2008. Velan expects to record a gain of approximately $37.5 million in the first quarter of its fiscal 2009 year.

Velan and BPS, which is owned by five senior executives of SRL, established SRL in 2003 to manufacture Trunnion Mounted API6D and 6A ball valves. SRL, whose name will be changed on the closing date, will continue to supply valves to the Velan Group.

Mr. Tom Velan, Velan's President, said "We are very proud of the world class company that has grown out of a meeting of the minds which took place just 5 years ago. Despite the great success in growing Velan Srl into a leading manufacturer of Trunnion Mounted API 6D and 6A ball valves, it became increasingly apparent that the 50/50 partnership relationship was not sustainable. Both partners have agreed to keep a business relationship in the future on a different commercial basis in order to continue to supply superior quality API 6D and 6A ball valves to the Oil & Gas industries."

Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of the Company. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. As a result, readers are advised that actual results may differ from expected results.

Contact Information

  • VELAN Inc.
    Tom Velan
    President
    514-748-7743
    514-908-0180 (FAX)
    or
    VELAN Inc.
    John D. Ball
    Chief Financial Officer
    514-748-7743
    514-908-0180 (FAX)
    www.velan.com