LAVAL, QUEBEC--(Marketwire - April 29, 2011) - Warnex Inc. ("Warnex")(TSX:WNX) announced today that it has entered into a credit support agreement (the "CSA") with Persistence Capital Partners ("PCP"), a leading Canadian healthcare private equity firm and Warnex's largest shareholder, pursuant to which PCP has agreed to guarantee Warnex's obligations under its existing banking facilities, thereby providing Warnex with enhanced operating flexibility.
"We are pleased with the confidence shown by PCP in assisting us in our dealings with our bankers," said Mark Busgang, President and CEO of Warnex. "As our largest share and debenture holder, PCP's continuing support both financially and operationally will aid us in completing our balance sheet restructuring and in growing our business."
On the basis of the guarantee provided by PCP to Warnex's current bankers, the authorized amount of Warnex's operating line of credit will be increased from $1 million to $1.25 million, effective until March 31, 2012, and Warnex's existing term loans will remain in place until their maturity.
Under the terms of the CSA, Warnex has agreed to pay to PCP, in consideration for the credit support consented, certain guarantee and standby fees. Additionally, for so long as the banking facilities and the debentures issued by Warnex to various holders remain outstanding, Warnex has undertaken certain covenants in favour of PCP relating to reporting, corporate governance, operations and financial matters. The full text of the CSA is available for consultation at www.sedar.com under Warnex's profile.
Warnex (www.warnex.ca) is a life sciences company devoted to protecting public health by providing laboratory services to the pharmaceutical and healthcare sectors. Warnex Analytical Services provides pharmaceutical and biotechnology companies with a variety of quality control services, including chemistry, chromatography, microbiology, method development and validation, and stability studies. Warnex Bioanalytical Services specializes in bioequivalence and bioavailability studies for clinical trials. Warnex Medical Laboratories provides specialized testing for the healthcare industry as well as pharmaceutical and central laboratory services. Warnex PRO-DNA Services offers DNA identification tests for paternity, maternity and other family relationships, as well as for immigration and forensic testing purposes. Warnex has three facilities located in Laval and Blainville, Quebec, and Thunder Bay, Ontario.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this news release are forward-looking and are subject to numerous risks and uncertainties, known and unknown. For information identifying known risks and uncertainties, relating to financial resources, liquidity risk, key customers and business partners, credit risk, foreign currency risk, government regulations, laboratory facilities, volatility of share price, employees, suppliers, and other important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the heading Risks and Uncertainties in Warnex's most recent Management's Discussion and Analysis, which can be found at www.sedar.com. Consequently, actual results may differ materially from the anticipated results expressed in these forward-looking statements.