ZCL Announces Redemption of Preferred Shares
EDMONTON, June 15, 2012 /CNW/ – ZCL Composites Inc. (TSX: ZCL) is
pleased to announce an agreement between ZCL Composites Inc (“ZCL”) and
the former owner of Dualam Plastics Inc. (“DPI”), now ZCL-Dualam Inc.,
dealing with matters that had arisen subsequent to the purchase of DPI.
Pursuant to this agreement, the preferred shares held by the former
owner of DPI, which were convertible into 1,078,947 common shares and
paid a dividend of 4.4% annually, are being redeemed prior to maturity
at the face value of $5,125,000. The preferred share redemption will
be used as consideration for the sale back of two DPI properties,
including non-core land and building held for sale, for proceeds of
$1,750,000, as well as to fund the settlement of claims for
$1,300,000. The balance remaining from the redemption of the preferred
shares of $2,075,000 will be paid through ZCL’s operating line.
In addition to reducing ZCL’s debt load, the conversion from preferred
shares to operating line results in interest payments now being
deductible for tax purposes.
ZCL is pleased with the outcome of this agreement as it aligns with the
“simplify to grow” strategy. The agreement has eliminated the long
term liability associated with the preferred shares and improved the
tax structure as a result, reduced management distraction and enabled
ZCL to continue to focus on its core competencies as North America’s
largest supplier and manufacturer of environmentally friendly
underground and aboveground fluid containment products.
About ZCL Composites Inc.
Our vision is to be the leading global provider of environmentally
friendly liquid storage, fluid handling and corrosion resistant
industrial products. More information about ZCL is available on its
website at www.zcl.com.
SOURCE ZCL Composites Inc.