West Street Capital Corporation

West Street Capital Corporation

May 29, 2009 17:02 ET

West Street Capital Corporation Reports 2009 First Quarter Results

TORONTO, ONTARIO--(Marketwire - May 29, 2009) - West Street Capital Corporation ("West Street" or the "company") (TSX VENTURE:WSC)(TSX VENTURE:WSC.PR.A) reported net income for the three months ended March 31, 2009 of $0.4 million, consistent with $0.4 million reported during the same period in 2008. Investment income decreased by $0.2 million from the same period in 2008 to $0.5 million for the three months ended March 31, 2009, and consists principally of dividends and interest earned on the company's securities portfolio. The decrease in investment income is a result of lower interest rates on the company's securities portfolio. After providing for unpaid preferred share dividend obligations of $0.7 million that accumulated during three month period, the net loss was $0.03 per common share, compared to a net loss of $0.03 per common share during the three months ended March 31, 2008.

The company classified investments within its securities portfolio as available-for-sale financial instruments and accordingly records changes in the market value of these investments in other comprehensive income. During the three months ended March 31, 2009, unrealized losses recorded in other comprehensive income were $0.4 million after tax, consistent with the prior year and offset the net income recorded during the period. Accordingly, the net book value attributed to the preferred shares was unchanged at $42.4 million or $25.23 per preferred share.

The company's major shareholder, Brookfield Asset Management Inc., ("Brookfield") intends to make a formal offer to purchase any Class E Preferred Shares, Series 1 of the company (the "Preferred Shares") that Brookfield does not currently own at a price of $35.00 for each Preferred Share. The company's Board of Directors has established a committee of Independent Directors to review the offer and the offer will include an independent valuation of the Preferred Shares.

Statements of Operations

(unaudited) Three months ended March 31  
$thousands, except per share amounts   2009     2008  
Investment income $ 521   $ 690  
Operating and legal expenses   35     25  
Net income before tax   486     665  
Current tax expense   106     226  
Future tax expense       85  
Net income $ 380   $ 354  
Net loss per common share $ (0.03 ) $ (0.03 )

Balance Sheets

$thousands, except per share amounts March 31, 2009   December 31, 2008  
    Cash and equivalents $ 17,165   $ 16,805  
    Securities   25,088     25,392  
    Interest receivable and other   181     235  
      $ 42,434   $ 42,432  
    Accounts payable and provisions $ 83   $ 58  
Shareholders' equity 1   42,351     42,374  
      $ 42,434   $ 42,432  
Attributable to each Class E Preferred Share, Series 1 1 $ 25.23   $ 25.25  
1)   Shareholders' Equity            
        March 31   Per Preferred  
    $thousands, except per share amounts   2009     Share  
    Shareholders' equity $ 42,351   $ 25.23  
    Less amounts attributed to preferred shares            
    Redemption value   41,887     24.96  
    Unaccrued dividends in arrears   51,293     30.56  
        93,180     55.52  
    Common share deficit $ (50,829 ) $ (30.29 )

As a result of cumulative dividends in arrears, the tangible net book value of the company currently accrues entirely to the preferred shares. Based on 1,678,465 preferred shares currently issued and outstanding.  

Note: This news release contains "forward-looking information" within the meaning of Canadian provincial securities laws and regulations, the word "intends" and other expressions that are predictions of or indicate future events, trends or prospects and which do not relate to historical matters identifying forward-looking information. Expressions of future or conditional verbs such as "will" are predictions of or indicate future events, trends or prospects and which do not relate to historical matters or identify forward-looking information. Forward-looking information in this news release includes statements with regard the company's major shareholder's intention to make a formal offer to purchase any Preferred Shares of the company that it does not currently own, and the independent valuation of the Preferred Shares included in the offer.

Although the company believes that the anticipated future results or achievements expressed or implied by the forward-looking information and statements are based upon reasonable assumptions and expectations, the reader should not place undue reliance on the forward-looking information and statements because they involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking information and statements.

Factors that could cause actual results to differ materially from those contemplated or implied by the forward-looking information and statements include: the behavior of financial markets, including fluctuations in interest and exchange rates, availability of equity and debt financing and other risks and factors detailed from time to time in the company's other documents filed with the Canadian securities regulators.

We caution that the foregoing list of important factors that may affect future results is not exhaustive. When relying on our forward- looking information to make decisions with respect to the company, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as may be required by law, the company undertakes no obligation to publicly update or revise any forward-looking information or statements, whether written or oral, that may be as a result of new information, future events or otherwise.

Contact Information

  • West Street Capital Corporation
    Brian D. Lawson
    (416) 359-8625