Royal Group extends operating credit facility
December 27 2005 - 7:00AM
PR Newswire (US)
TORONTO, Dec. 27 /PRNewswire-FirstCall/ -- Royal Group Technologies
Limited (RYG: TSX; NYSE) today announced that its banking syndicate
has agreed to provide an extension of the Company's current
operating credit facility. The credit facility allows Royal Group
access to up to $312.5 million of operating credit, subject to
security availability. The extension will mature on December 31,
2006, with the only significant changes to financial covenants
being EBITDA/Interest Coverage reducing from 5.0:1 to 4.5:1, and
tangible net worth reducing from $1.05 billion to $850 million.
Royal Group also advised that the previously announced process to
solicit bids for the Company is expected to continue into early
2006. At this time, a firm offer to acquire the company has not
been received and there can be no assurance that such an offer will
be received or a transaction completed. Commenting on the extension
of the operating credit facility, Lawrence J. Blanford, Royal
Group's President and CEO noted that, "it will allow us the
flexibility to arrange a more permanent facility, pending the
outcome of the sale process". Mr. Blanford added that, "an offer to
purchase the excess real estate noted in last week's news release
has now been accepted, with proceeds of $40 million expected in
early 2006, which will give us additional liquidity". "We have now
successfully completed the fourth element of our Management
Improvement Plan, the arrangement of suitable operating financing",
concluded Mr. Blanford. Royal Group Technologies is a manufacturer
of innovative, polymer-based home improvement, consumer, and
construction products. The company has extensive vertical
integration, with operations dedicated to provision of materials,
machinery, tooling, real estate, and transportation services to its
plants producing finished products. Royal Group's manufacturing
facilities are primarily located throughout North America, with
international operations in South America, Europe, and Asia.
Additional investment information is available on Royal Group's web
site at http://www.royalgrouptech.com/ under the "Investor
Relations" section. The information in this document contains
certain forward-looking statements with respect to Royal Group
Technologies Limited, its subsidiaries and affiliates. These
statements are often, but not always made through the use of words
or phrases such as "expect", "should continue", "continue",
"believe", "anticipate", "suggest", "estimate", "contemplate",
"target", "plan", "budget", "may", "will", "schedule" and "intend"
or similar formulations. By their nature, these forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by management, are
inherently subject to significant, known and unknown, business,
economic, competitive and other risks, uncertainties and other
factors affecting Royal specifically or its industry generally that
could cause actual performance, achievements and financial results
to differ materially from those contemplated by the forward-looking
statements. These risks and uncertainties include the ongoing
shareholder value maximization process and its outcome; the ongoing
internal review and investigations by the Audit Committee of the
Board of Directors and its outcome; fluctuations in the level of
renovation, remodelling and construction activity; changes in
product costs and pricing; an inability to achieve or delays in
achieving savings related to the cost reductions or increases in
revenues related to sales price increases; the sufficiency of our
restructuring activities, including the potential for higher actual
costs to be incurred in connection with restructuring activities
compared to the estimated costs of such actions; the ability to
recruit and retain qualified employees; the level of outstanding
debt and our current debt ratings; Royal's ability to maintain
adequate liquidity and refinance its debt structure by December 31,
2006, the expiry date of its current bank credit facility; the
ability to meet the financial covenants in our credit facilities;
changes in product mix; the growth rate of the markets into which
Royal's products are sold; market acceptance and demand for Royal's
products; changes in availability or prices for raw materials;
pricing pressures resulting from competition; difficulty in
developing and introducing new products; failure to penetrate new
markets effectively; the effect on foreign operations of currency
fluctuations, tariffs, nationalization, exchange controls,
limitations on foreign investment in local business and other
political, economic and regulatory risks; difficulty in preserving
proprietary technology; adverse resolution of any litigation,
investigations, administrative and regulatory matters, intellectual
property disputes, or similar matters; changes in securities or
environmental laws, rules and regulations; currency risk exposure
and other risks described from time to time in publicly filed
disclosure documents and securities commission reports of Royal
Group Technologies Limited and its subsidiaries and affiliates. In
view of these uncertainties we caution readers not to place undue
reliance on these forward-looking statements. Statements made in
this document are made as of December 27, 2005 and Royal disclaims
any intention or obligation to update or revise any statements made
herein, whether as a result of new information, future events or
otherwise. DATASOURCE: Royal Group Technologies Limited CONTACT:
Mark Badger, Vice President of Marketing and Corporate
Communications, Royal Group Technologies Limited, Phone (905)
264-0701
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