U.S. Automotive Manufacturing, Inc. Announces Strategic Investment in its Shares
16 March 2000
U.S. Automotive Manufacturing, Inc. Announces Strategic Investment in its Shares
NEW YORK, March 15 U.S. Automotive Manufacturing, Inc.
reported that it had entered into a letter of intent whereby
Satisfied Brake Products Ltd. ("Satisfied") of Montreal, Canada will make a
strategic investment in U.S. Automotive Manufacturing, Inc. ("USAM").
Subject to the satisfactory completion of due diligence, documentation and
approval by the shareholders of USAM, Satisfied will help to arrange for the
retirement (without conversion) of the USAM's Reg "S" Debentures and purchase
newly issued shares such that they would hold approximately 65% of the shares
of USAM. The purchase price of the shares will be $1.00 per share and the
material use of proceeds will be to improve product flow and upgrade the
USAM facilities ( QS 9000). Before investment, USAM currently has
1,317,824 shares outstanding. The strategic investment is expected to close
in the third quarter.
Martin Chevalier, President and CEO of USAM, stated that "USAM was excited
at the prospect of a strategic alliance with Satisfied." Mr. Chevalier noted
that "Satisfied serves the same market as USAM, with little or no overlap in
customer base." He said that "while the investment deals with the securities
overhang resulting from the Reg 'S' Debentures and stabilizes the Company's
overall financial condition, the resulting alliance further serves the
shareholders and customers of USAM in aligning the resources of both companies
in a consolidating market -- a case of the whole is greater than the sum of
its parts."
Mr. Chevalier concluded by stating that "the board sees the pending
investment as a material benefit to the shareholders, employees and customers
of USAM. The potential dilution occasioned by the Reg 'S' Debentures is
formidable and without benefit to the company's ability to compete in its
marketplace." He continued that "based on this new alliance, the two
companies contemplate a substantial inter-company supply relationship, better
utilizing USAM's capacities, and thereby translating into an improved bottom
line."
U.S. Automotive Manufacturing, Inc., through its wholly owned
subsidiaries, Quality Automotive Company and U.S. Automotive Friction, Inc.,
manufactures, assembles and distributes new and rebuilt automotive products
(brake pads, linings and remanufactured brake shoes) to other automotive
manufacturers and to the automotive after-market. The Company intends to
position itself to compete more formidably in the manufacture and sale of
friction materials as well as other "under car" automotive parts through both
acquisition and internal growth.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: The Statements which are not historical facts contained herein are
forward looking statements that relate to plans for future activities. Such
forward-looking information involves a number of important known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially different from any
future results, performance or achievements of the Company expressed or
implied by such forward looking statements. Such risks, uncertainties and
factors, include, but are not limited to, those relating to the integration of
recently acquired companies, industry competition, any remaining Year 2000
issues, the possible need for future financing and possible obsolescence of
equipment and other risks detailed in the Company's filings with the
Securities and Exchange Commission. The words "believe", "expect", "intend",
"plan" and similar expressions identifying forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which only speak as of the date the statement was made.