Wescast Industries Inc.

Wescast Industries Inc.

August 04, 2005 09:25 ET

Wescast Announces Sale of Brantford, Ontario Foundry

BRANTFORD, ONTARIO--(CCNMatthews - Aug. 4, 2005) - Wescast Industries Inc. ("Wescast") (TSX:WCS.SV.A) announced today that the Board of Directors has approved the sale of the land, buildings and the majority of the production assets associated with its foundry operation in Brantford, Ontario to Gemini Fire Protection Solutions, Inc. ("Gemini"). The sale is expected to close in the third quarter of 2005, upon satisfaction of certain standard commercial and regulatory conditions.

This announcement follows Wescast's adoption of a North American foundry optimization strategy. In February, Wescast announced the expected closing of the Brantford foundry as part of a plan to lower costs and increase capacity utilization in its North American foundry operations. Since that time, much of the production at the Brantford facility has been shifted to other Wescast locations and the Brantford plant workforce has been reduced.

Wescast will receive approximately $26.3 million in cash proceeds from the asset sale, a portion of which is contingent on leaving certain production volumes in the plant for a period extending twelve months beyond the closing date. The Company expects to realize a pre-tax loss of about $10 million on the sale of assets.

The purchaser (Gemini) is a 100% Canadian owned manufacturer of fire protection products, for use in commercial and industrial applications. In conjunction with the purchase and sale agreement, the parties have entered into a supply agreement under which Wescast has the option of continuing to have current production requirements supplied from the Brantford foundry through Gemini. Gemini is to begin operating immediately upon closing, which is expected to provide ongoing employment opportunities to the current workforce at the facility.

"We are pleased that we have been able to complete the sale of the Brantford foundry in a manner that minimizes the impact to current employees and the Brantford community," said Ed Frackowiak, Wescast Chairman and Chief Executive Officer. "This sale is also a positive step in the rationalization of our North American foundry capacity as part of our vision to be the leading provider of sales and technology for exhaust manifolds and turbo charger housings in North America, Europe and Asia."

About Wescast

Wescast Industries Inc. is the world's largest supplier of exhaust manifolds for passenger cars and light trucks. The Company designs, casts, machines and assembles high-quality iron exhaust manifolds, turbo charger housings and integrated turbo manifolds for automotive OEMs. The Company's global sales and design activities are coordinated through its technical development centre in Canada and supported by sales and design centres in the United States, Japan and Europe. The Company operates seven production facilities in North America and Europe, including a 49% interest in United Machining Inc., an accredited Minority supplier in Michigan. The Company is recognized worldwide for its quality products, innovative design solutions and highly committed workforce.

Learn more at www.wescast.com.

Forward Looking Statements

Wescast and its representatives may periodically make written or oral statements that are "forward-looking", including statements included in this news release and in our filings with applicable Securities Commissions and in reports to our stockholders. These statements may be identified by words such as "believe," "anticipate," "project," "expect," "intend" or other similar expressions, and include all statements which address operating performance, events or developments that we expect or anticipate may occur in the future (including statements relating to future sales or earnings expectations, volume growth, awarded sales contracts and earnings per share expectations or statements expressing general optimism about future operating results). Such statements involve risks and uncertainties that may cause unanticipated events and actually evolve to be materially different from those either expressed or implied. These factors include, but are not limited to, risks associated with the automotive industry, production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, environmental risks, competition from other producers and ability to access sufficient capital from internal and external sources; as a consequence, actual results may differ materially from those anticipated in the forward-looking statements. For more detailed information regarding these risks you may refer to Wescast's publicly filed documents with applicable Canadian securities authorities. Wescast undertakes no obligation to update any of these forward-looking statements.

Contact Information

  • Wescast Industries Inc.
    Mr. Ed Frackowiak
    Chairman & Chief Executive Officer
    (519) 750-0000
    Wescast Industries Inc.
    Mr. Gord Currie
    Vice President and Chief Financial Officer
    (519) 750-0000