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Attention Business/Financial Editors
CVTech Group Inc. announces exercise of underwriter's option
DRUMMONDVILLE, QC, July 3 /CNW Telbec/ - CVTech Group Inc. (Toronto Stock
Exchange: CVT) ("CVTech" or the "Corporation") is pleased to announce that
Laurentian Bank Securities Inc. ("LBS") has exercised the underwriter's option
granted to it pursuant to the underwriting agreement entered into between the
Corporation and LBS on June 22, 2009 to acquire 2,162,500 additional
subscription receipts (the "Subscription Receipts") at a price of $1.60 per
Subscription Receipt (the "Additional Subscription Receipt Financing"). These
additional Subscription Receipts were issued today for gross proceeds of
$3,460,000.
As previously announced, each Subscription Receipt is exchangeable for no
additional consideration into one common share of the Corporation at the time
of the closing of the acquisition by CVTech of a North American company,
announced by CVTech on February 11, 2009 (the "Acquisition"). The gross
proceeds from the private placement of the Subscription Receipts, which now
total $9,540,000, will be held in escrow until the closing of the Acquisition
and will be returned to holders of the Subscription Receipts if the closing of
the Acquisition has not occurred by August 15, 2009. The gross proceeds from
the private placement of the Subscription Receipts and the gross proceeds of
$5,460,000 from the previously announced private placement of 3,412,500 common
shares of the Corporation at a price of $1.60 per common share will total
$15,000,000. This amount will be used to fund the Acquisition.
The Additional Subscription Receipt Financing is subject to the final
approval of the Toronto Stock Exchange.
The Corporation also reports progress towards the closing of the
Acquisition. The final versions of the contracts effecting the Acquisition are
almost completed and the financing has been put in place. The Corporation
expects to close the Acquisition shortly.
OVERVIEW
CVTech is a management corporation. Some of its subsidiaries design,
manufacture and sell CVTs. Another subsidiary, Thiro, provides services for
the construction and maintenance of electrical transmission and distribution
lines. It has two indirect subsidiaries: Thiro USA and J.J.L. Déboisement inc.
("J.J.L.") Thiro USA, like Thiro, provides services for the construction and
maintenance of electrical transmission and distribution lines. J.J.L.
specializes in vegetation control on rights-of-way for transmission and
distribution lines. The subsidiary CVTech-AAB inc. specializes in the
rebuilding of crankshafts and reconditioning of cylinders, and the
distribution of engine parts.
CVTech is the owner of the trademarks and CVTech R&D inc. holds the
intellectual property on products which are part of its technological
solutions.
CVTech currently has a staff of approximately 715 employees comprising
160 employees in the CVT systems and related products segments and 555
employees in the electricity segment.
FORWARD-LOOKING STATEMENTS
The present document may contain forward-looking statements that reflect
the current expectations of management with regard to future events. These
forward-looking statements depend on a certain number of factors and are
subject to risks and uncertainties. The actual results could differ from those
anticipated. Management undertakes no obligation to update or revise the said
forward-looking statements on receipt of new information or subsequent to
future events other than the ones required by law.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy, which may be made only by means of a
prospectus, nor shall there be any sale of the Subscription Receipts in any
state, province or other jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under securities
laws of any such state, province or other jurisdiction. The Subscription
Receipts of CVTech have not been and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered, sold or delivered
in the United States absent registration or an application for exemption from
the registration requirements of U.S. securities laws.
For further information with regard to CVTech, the reader is invited to
consult the SEDAR database and the Corporation's Website at:
www.groupecvtech.com.
-30-
/For further information: André Laramée, MBA, President and CEO, CVTech
Group Inc., (819) 479-7771; Mario Trahan, CMA, Chief Financial Officer, CVTech
Group Inc., (819) 479-7771/
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