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Tesma announces completion of senior debt offering

25 May 1999

Tesma announces completion of senior debt offering

    CONCORD, ON, May 25 /CNW-PRN/ - Tesma International Inc. (TSE:TSM.A;
NASDAQ:TSMA) today announced the successful completion of a private placement
of $60 million 6.22% Senior Unsecured Notes due May 2006. ``The proceeds of
the offering will be used to repay drawings under Tesma's operating lines and
for other general corporate purposes, including the purchase of fixed assets
required for new product programs,'' states Anthony Dobranowski, Tesma's
Executive Vice President and CFO. ``This long-term financing is intended to
take advantage of very attractive interest rates and free up operating lines
which were used to pay for Tesma's last two acquisitions, Triam Sterling
Heights and HAC Corporation. The debt offering is a cost effective alternative
to equity financing and leaves Tesma in the position of having a very healthy
capital structure, a manageable level of debt, and ample facilities for
ongoing operating requirements and future growth.''
    The long-term debt offering is part of Tesma's strategic plan to
diversify its sources of funding and improve the flexibility of its bank
arrangements. Prior to this placement of debt, Tesma successfully negotiated a
$10 million increase in its main operating line to $50 million and began the
process of restructuring the debt of the newly acquired Korean subsidiary, HAC
Corporation, at much more favourable interest rates.
    Tesma is a global supplier of highly engineered engine, transmission and
fueling systems and components for the automotive industry. Tesma's strong
market presence and strategy for continuing growth results from its unique
focus on Innovation, Engineering and Performance. Tesma employs over 3,600
employees in North America, Europe and Asia in 20 manufacturing facilities and
2 research centres.