Ivaco Inc. - Sale of Ipex Completed: Ivaco Receives $260 Million Cash

7 August 1999

Ivaco Inc. - Sale of Ipex Completed: Ivaco Receives $260 Million Cash

    MONTREAL--Aug. 6, 1999--Ivaco Inc. (ME:IVA.) (TSE:IVA.)announces that together with its partner, Scepter Holdings Inc., it has completed the sale of IPEX Inc. for $520 million. The purchaser is Glynwed International plc of Birmingham, England.
    Paul Ivanier, President and Chief Executive Officer of Ivaco said that Ivaco has received $260 million cash for its 50 percent share in IPEX. This is equivalent to $8.45 in cash received for every outstanding Ivaco Class A and Class B share. A net gain from the transaction of approximately $70.5 million or $2.29 per share will be included in the third quarter results. These amounts are after taking into consideration related costs and taxes.
    It is the Company's intention, as previously indicated to shareholders, to reduce its long-term debt, which at March 31, 1999 was $476 million after removing the portion pertaining to IPEX. The Company's highest interest bearing debt are the US$122.5 million (approximately $185 million Canadian) Senior Notes listed on The New York Stock Exchange which bear interest at 11.5 percent p.a. The Company expects that during September 1999 it will deposit the funds necessary for the full redemption of the Senior Notes for payment in September 2000. This is the earliest date possible for providing for redemption, under the terms of the Senior Notes, and the sale of our 50 percent interest in IPEX was timed accordingly, Mr. Ivanier said.
    All expenses associated with the repayment of the Senior Notes have been deducted in arriving at the estimated net gain of $70.5 million mentioned above.
    After providing for redemption in full of the U.S. Senior Notes, Ivaco is expected to be left with more than $40 million cash in its treasury from this transaction. In addition, Ivaco will also have made approximately $10 million in cash deposits specifically earmarked for future interest payments for the Senior Notes up to September 2000.
    Mr. Ivanier further stated that the sale of IPEX goes a long way to fulfilling the commitment made to shareholders at the Company's annual meeting in May 1999. At that meeting Ivaco said it was taking the necessary steps which would allow it to substantially reduce its long-term debt and fixed charges. Another significant step in achieving this goal is the sale of the Company's property in Atlanta, which should provide about $100 million Cdn. The Atlanta land sale is expected to close early next year. This transaction is subject to the approval of a landmark design bridge connecting the property to midtown Atlanta.
    The bridge was unanimously approved on June 23rd of this year by the Atlanta Regional Commission and represents a major step towards the final approval process of the bridge.
    Ivaco is a Canadian corporation and is a leading North American producer of steel, fabricated steel products and precision machined components. Ivaco has operations in Canada and the United States. Shares of Ivaco are traded on The Toronto Stock Exchange and The Montreal Exchange (IVA).