CALGARY, ALBERTA--(Marketwired - May 25, 2015) - CEMATRIX Corporation (TSX VENTURE:CVX) (the "Corporation" or "CEMATRIX") announces that its wholly owned subsidiary, CEMATRIX (Canada) Inc. ("CEMATRIX Canada") has entered into a new financing agreement with Tallinn Capital Mezzanine Limited Partnership through its general partner Tallinn Capital Partners Corp. ("Tallinn Capital") for up to $2,000,000 of working capital financing to replace its current $1,000,000 operating line of credit (the "Line of Credit") through the Royal Bank of Canada (the "Bank").
The Corporation chose to work with Tallinn Capital as it was able to provide the necessary level of working capital financing required to support management's forecasts and CEMATRIX Canada's anticipated operations for the year. It is management's intention that the Bank will continue to supply day to day banking services to the Corporation.
The agreement with Tallinn Capital consists of a mezzanine loan of $750,000 (the "Mezzanine Loan") and a receivable purchasing agreement for the sale of up to $1,250,000 of trade receivables (the "Receivable Purchase Agreement") (collectively, the "Tallinn Facilities"). The proceeds from the Mezzanine Loan will be used to repay the Line of Credit and to provide working capital to finance CEMATRIX Canada's operations. The Mezzanine Loan bears interest at a rate of 16.5% per annum, payable monthly and maturing on April 30, 2016. The Receivable Purchasing Agreement is available on the sale of specific trade receivables up to an amount of $1,250,000 and will be used for working capital financing. For qualifying sales invoices which are purchased under the Receivable Purchase Agreement, CEMATRIX Canada will pay a discount rate of 2.25% for the first 30 days that the sales invoice is outstanding, with a further daily discount rate of 0.075% after 30 days until the sales invoice is collected.
The Tallinn Facilities are secured by corporate guarantees from the Corporation and CEMATRIX (USA) Inc. ("CEMATRIX USA") and general security agreements providing a floating first charge over all present and after acquired personal property of the Corporation, CEMATRIX CANADA and CEMTRIX USA.
"The new financing arrangement with Tallinn Capital will provide the necessary funding to finance our projected sales growth for 2015, and more if necessary," stated CEO and President Jeff Kendrick. "We consider this a short term solution, as we look to put in place a new credit facility with a senior lender before the end of the fiscal year. Furthermore, CEMATRIX Canada is nearing completion of two new cellular concrete production units to meet the expected sales growth from an operational perspective. These new production units are expected to increase CEMATRIX Canada's production capacity by up to 60% and will improve its capability of working on multiple large scale projects simultaneously. We are pleased with our new financing arrangement and increased capacity and are focused on delivering results, as we approach the busy construction season."
CEMATRIX is an Alberta corporation with its head offices in Calgary, Alberta. The Corporation, through its wholly owned subsidiaries, is a manufacturer and supplier of technologically advanced cellular concrete products with applications in a variety of markets, including oil and gas construction and infrastructure construction. Cellular concrete provides a cost and labour saving solution as a replacement for rigid and other insulating materials in frost-susceptible or permafrost conditions. Cellular concrete is also used in void filling situations and as a replacement for granular fills and weak or unstable soils.
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Forward-looking information: This news release contains certain information that is forward-looking and is subject to important risks and uncertainties (such statements are usually accompanied by words such as "anticipate", expect", "would' or other similar words). Forward-looking statements in this document are intended to provide CEMATRIX security holders and potential investors with information regarding CEMATRIX and its subsidiaries' future financial and operations plans and outlook. All forward-looking statements reflect CEMATRIX's beliefs and assumptions based on information available at the time the statements were made. Readers are cautioned not to place undue reliance on this forward-looking information. CEMATRIX undertakes no obligation to update or revise forward-looking information except as required by law. For additional information on the assumptions made and the risks and uncertainties which may cause actual results to differ from the anticipated results, refer the CEMATRIX's Management Discussion and Analysis dated March 25, 2015 under CEMATRIX's profile on SEDAR at www.sedar.com and other reports filed by CEMATRIX with Canadian securities regulators.