Trailmobile Canada Limited Completes Financing Arrangement

    MISSISSAUGA, Ontario--Jan. 10, 2002--Trailmobile Canada Limited (the "Company") today announced that it has completed a financing arrangement with Tyco Capital, whereby the Company will be permitted a temporary over-advance on its line of credit of up to CDN$2.5 million. The temporary over-advance is primarily due to a provision that will be charged in the first quarter of fiscal 2002 relating to a receivable from Trailmobile Trailer Canada Limited in the amount of CDN$2.4 million. The over-advance will take effect immediately and be in place through April 2002. One of the conditions for the temporary over-advance includes an equity financing of approximately $CDN3.5 million, subject to regulatory approval, which must be funded no later than April 30, 2002. Trailmobile Corporation has guaranteed an amount equal to any over-advance on the revolving line of credit.
    Trailmobile Corporation has already pledged approximately CDN$2.0 million of the proposed equity financing to be completed no later than April 30, 2002. Trailmobile Canada Limited has also pledged as security, unencumbered collateral with an estimated fair value of CDN$1.5 million. "These pledged funds and conveyed collateral, have been placed in escrow as security for Tyco Capital who will in turn fund the Company and allow us to bring vendor payables to within regular business terms", said Frank Michalargias, CFO for Trailmobile Canada Limited.
    Management feels the projected increase in production as a result of the recent Chapter 11 filing by Trailmobile Trailer LLC in the USA coupled with a successful equity financing should be sufficient to eliminate the Company's over-advance position.

    Trailmobile Canada Limited manufactures dry-freight trailers for commercial trucking customers in Canada and the United States. The company is majority owned by Chicago-based Trailmobile Corporation. Together, they form one of North America's largest trailer manufacturer, with an extensive sales and distribution network in both the USA and Canada. Trailmobile Canada Limited's head office and manufacturing facility are located in Mississauga, Ontario.