Dynex Announces Filing of Preliminary Prospectus for Rights Offering to
Shareholders

    
    Listing:  TSX Venture Exchange
    Symbol:   DNX
    

LINCOLN, England, Oct. 26 /CNW Telbec/ - Dynex Power Inc., a leading specialist high power semiconductor company, announced today that it has filed a preliminary prospectus with the securities commissions in the provinces of British Columbia, Alberta and Ontario relating to a rights offering.

The Corporation's subsidiary, Dynex Semiconductor Limited, is in the process of replacing and expanding its fabrication facility for silicon chips to be used in IGBT modules. The existing line, which processes 4-inch diameter silicon, is being replaced by two 6-inch lines. The installation of the two new lines will increase capacity approximately tenfold and is expected to require GBP11 million in capital expenditure, based on estimates received from suppliers, and an increase of approximately GBP1.5 million of working capital.

In order to start the expansion, a short term facility of GBP7.3 million was arranged with ICBC ( London ) Ltd, and was guaranteed by Zhuzhou CSR Times Electric. The net proceeds of the rights offering will be used by Dynex to repay the ICBC loan and to complete the expansion project.

Under the terms of the rights offering, shareholders of record will receive rights to subscribe for common shares in the capital of Dynex. Holders of rights that fully exercise their rights will be entitled to subscribe for additional common shares, if available, that were not otherwise subscribed for in the rights offering.

Zhuzhou CSR Times Electric, the majority shareholder of the Corporation, has indicated that it will subscribe for 75% of all common shares subscribed for as part of the rights offering.

The number of common shares to be issued, the number of rights required to purchase one common share, the subscription price per common share, the record date and the expiry date of the rights offering will be determined at the time of filing the final prospectus.

Further details concerning the rights offering are contained in the preliminary prospectus, which has been filed on SEDAR at www.sedar.com.

The rights offering is subject to regulatory approval, including that of the TSX Venture Exchange.

This press release is not an offer to sell or the solicitation of an offer to buy securities in any jurisdiction. The rights and common shares issuable on exercise of the rights have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

About the Company

Dynex designs and manufactures high power bipolar semiconductors, high power insulated gate bipolar transistor (IGBT) modules, high power electronic assemblies and radiation hard silicon-on-sapphire integrated circuits (SOS IC's). The company's power products are used worldwide in power electronic applications including electric power transmission and distribution, renewable and distributed energy, marine and rail traction motor drives, aerospace, electric vehicles, industrial automation and controls and power supplies. Its IC products are used in demanding applications in the aerospace industry. Dynex Semiconductor Ltd is its only operating business and is based in Lincoln, England in a facility housing the fully integrated silicon fabrication, assembly and test, sales, design and development operations. Dynex is majority owned by Zhuzhou CSR Times Electric Co., Ltd.

Zhuzhou CSR Times Electric Co., Ltd. is based in Hunan Province in the People's Republic of China . It is listed on the Hong Kong stock exchange. CSR Times Electric is mainly engaged in the research, development, manufacture and sales of locomotive train power converters, control systems and other train-borne electrical systems, as well as the development, manufacturing and sales of urban railway train electrical systems. In addition, CSR Times Electric is also engaged in the design, manufacturing and sales of electric components including power semiconductor devices for the railway industry, urban railway industry and non-railway purposes.

Press announcements and other information about Dynex are available at www.dynexsemi.com.

Further information on CSR Times Electric can be found at www.timeselectric.cn/en

    
    Neither TSX Venture Exchange nor its Regulation Services Provider (as
    that term is defined in the policies of the TSX Venture Exchange) accepts
    responsibility for the adequacy or accuracy of this release.
    

%SEDAR: 00010667E

For further information: Dr. Paul Taylor, President and Chief Executive Officer or Bob Lockwood, Finance Director and Chief Financial Officer, Dynex Power Inc., Tel: [phone], Email: [email protected]