Press release from Marketwire
Wescast Industries Inc. Provides Update on Proposed Acquisition by Sichuan Bohong Industry Co., Ltd.
Friday, October 21, 2011
Wescast Industries Inc. Provides Update on Proposed Acquisition by Sichuan Bohong Industry Co., Ltd.17:30 EDT Friday, October 21, 2011BRANTFORD, ONTARIO--(Marketwire - Oct. 21, 2011) - Wescast Industries Inc. (TSX:WCS.A) ("Wescast") today provided an update on the proposed acquisition (the "Acquisition") of Wescast by Sichuan Bohong Industry Co., Ltd. ("Bohong") of China set out in the previously-announced Memorandum of Understanding ("MOU") between the parties. Wescast announced on September 20, 2011 that Bohong had not delivered a deposit of C$2.0 million as required under the MOU. Although such deposit has not been delivered and Wescast has not waived this breach of the MOU by Bohong, the MOU has not been terminated and the parties have continued to work towards entering into a definitive and binding arrangement agreement providing for the Acquisition. Such agreement would supercede the MOU. Among other things, the parties are expected to discuss and consider the timing, terms and conditions of Bohong's financing for the Acquisition and certain governmental approvals. Wescast understands that the proposed source of Bohong's financing, China Development Bank, has continued its due diligence and evaluation of the Acquisition. There can be no assurances, at this time, that the parties will enter into a definitive and binding arrangement agreement providing for the Acquisition (and as to the timing, terms and conditions of such an agreement), that Bohong will obtain the necessary financing for the Acquisition (and as to the timing, terms and conditions of such financing) and/or that the Acquisition will occur. The entering into of any such definitive and binding agreement providing for the Acquisition would be subject to, among other things, the approval of Wescast's Board of Directors.About WescastWescast Industries Inc. is the world's leading supplier of cast exhaust manifolds for passenger cars and light trucks. In addition to other products, Wescast designs, casts, machines and assembles exhaust system components, primarily exhaust manifolds, turbo charger housings and integrated turbomanifolds for automotive original equipment manufacturers ("OEMs") and Tier 1 customers for the car and light truck markets in North America, Europe, Asia, Africa, South America and Australia. Wescast employs approximately 2,000 people in 7 production facilities and 5 sales and design centres in Canada, Hungary, the United States, Germany, Japan and China. Wescast also has sales and technical design representation in the United Kingdom and France. Wescast is recognized worldwide for its quality products, innovative design solutions and highly committed workforce.Learn more at www.wescast.com.Forward Looking StatementsThe contents of this news release contain statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking statements based on certain assumptions. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Persons reading this news release are cautioned that such information may not be appropriate for other purposes. Such forward-looking statements include the statements regarding the proposed Acquisition, including the parties possibly entering into a definitive and binding arrangement agreement (and the timing, terms and conditions thereof), Bohong's proposed financing of the Acquisition (and the timing, terms and conditions thereof), the parties' discussions regarding the proposed Acquisition, and closing of the Acquisition, and may also include financial and other projections as well as statements regarding Wescast's future plans, objectives or performance for the current period and subsequent periods and regarding the markets for Wescast's products. The words "may", "would", "could", "will", "likely", "expect", "anticipate", "estimate", "intend", "plan", "forecast", "project" and "believe" or other similar words and phrases are intended to identify forward-looking statements. Persons reading this news release are cautioned that such statements are only predictions, and that Wescast's actual future results or performance may be materially different.This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including Wescast's perception of historical trends, current conditions, expected future developments as well as other factors we believe are appropriate in the circumstances.Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties principally relate to the risks associated with the Acquisition, including the negotiation of and discussions relating to a definitive and binding arrangement agreement, and the automotive industry and include, but are not limited to: the failure of the parties to enter into a definitive and binding arrangement agreement, the failure of Bohong to obtain the necessary financing, the possibility that any conditions to closing of the Acquisition under any such agreement, including regulatory, shareholder and/or court approvals, may not be satisfied or waived, Wescast's operating and/or financial performance, including the effect of new accounting standards on Wescast's reported financial results, fluctuations in interest rates, changes in consumer and business confidence levels, consumers' personal debt levels, vehicle prices, the extent and nature of purchasing or leasing incentive campaigns offered by automotive manufacturers, environmental emission regulations, fuel prices and availability, the continuation and extent of outsourcing by automotive manufacturers, changes in raw material and other input costs, Wescast's ability to continue to meet customer specifications relating to product performance, cost, quality, delivery and service, industry cyclicality or seasonality, trade and/or labour issues or disruptions, customer pricing pressures, pricing concessions and cost absorptions, actual levels of program production volumes by Wescast's customers compared to original expectations, including program cancellations or delays, price reduction pressures, dependence on certain engine programs and the market success and consumer acceptance of the vehicles into which such powertrain products are installed, Wescast's relationship with and dependence on certain customers, currency exposure, failures in implementing Wescast's strategy, technological developments by Wescast's competitors and customers, government and regulatory policies and changes in the competitive environment in which Wescast operates.Wescast does not undertake any obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as required by law.FOR FURTHER INFORMATION PLEASE CONTACT: Edward G. FrackowiakWescast Industries Inc.Chairman and CEO(519) 750-0000www.wescast.com