Mecachrome completes its financial restructuring in France and Canada

The recovery plan of Ace Management (Aerofund funds), the FSI and Solidarity Fund QFL takes effect

TOURS, France and MONTRÉAL, Dec. 18 /CNW Telbec/ - Mecachrome announces its emergence from the safeguard procedure in France and the implementation of its plan of reorganization and compromise in Canada (under the Companies' Creditors Arrangement Act). This step marks the completion of its financial restructuring and reorganization which began on December 12, 2008 .

The new sole shareholder of the Mecachrome Group is Meca Dev, a company based in Tours, France which is owned by Aerofund and Aerofund II (both managed by ACE Management) (combined holding of 35%) and by the Fonds Stratégique d'Investissement (30%) and the Solidarity Fund QFL (35%). Each of these three shareholders has contributed equity of (euro)15 million. The transaction is also being financed by 6 French banks, led by BNP Paribas and Crédit Agricole Centre Loire, in an amount of (euro)22 million.

The consortium of investors is delighted that the Company has been able to retain the confidence of its customers in these difficult times for the automotive and aerospace industries. They plan to grow Mecachrome's industrial operations and to consolidate its position based on its technological assets and know-how. Meca Dev will thus be actively involved in Mecachrome's return to long-term profitability and in strengthening its reputation among its customers, who represent leading names in the aerospace and automotive industries.

"We are very pleased to have successfully completed our restructuring process in Canada and in France . This is a great day for the Company, its customers, suppliers and employees," said Julio De Sousa, Mecachrome's President and Chief Executive Officer, "I wish to thank everyone who supported us during this process which has allowed us to strengthen our financial position and be better positioned for the future with a stronger foundation and a less onerous cost structure. From now on, we will be able to focus on meeting our customers' needs and capitalizing on future opportunities."

Thierry Letailleur, President of ACE Management, said: "Since 2008, ACE Management has never lost confidence in Mecachrome's potential. Since January 2009 , when we and our partner Fund QFL provided temporary financing of (euro)20 million, we have worked to develop a strong industrial and economic plan. Our negotiations with the Canadian bondholders allowed us to ensure its financial viability. Once we had demonstrated the credibility of our plan, we needed to complete the financing: the FSI came through quickly and its support for the project, our common vision and its firm commitment were key to the success of this transaction. The support Mecachrome received from Airbus and Safran during the transitional period was also decisive."

Gilles Michel, CEO of the FSI, said: "After a long and complex process, the FSI is pleased with this successful outcome which marks the beginning of a new industrial venture for Mecachrome. Mecachrome can count on the active support of its shareholders, who have a common long-term vision."

Yvon Bolduc, President and CEO of the Solidarity Fund QFL remarked "Solidarity Fund QFL is delighted that a long-term solution has been found which preserves the Company's character in terms of its operational and geographical equilibrium. We believe it is particularly important that this company, which is one of only a few SMEs with operations in both France and Quebec , should be able to pursue its international growth on this basis."

The initial distribution to Canadian creditors of the consideration provided for in the plan will take place within the next thirty (30) days. The existing shares of the Company (multiple voting and subordinate voting shares) have been cancelled for no consideration. Holders of the securities of the Company should consult their tax advisers with regard to the tax consequences of the restructuring and the plan in light of their particular situations.

About Mecachrome

Mecachrome is a leader in the design, engineering, manufacture and assembly of precision-engineered components for aircraft and automotive applications. Operating in France and Canada , Mecachrome had sales of (euro)295 million in 2008 and employs almost 1500 people, of whom nearly 1300 are employed at its five locations in France .

About ACE Management

ACE Management advises and manages 7 investment funds representing about (euro)300 million in assets. The company has over 15 years' experience of equity investment in the aerospace, defence and security industries.

Funds under management include Aerofund I and II, which are sponsored by CDC Entreprises as part of a France Investissement program and by leading industrial groups in the aerospace industry (EADS, Airbus, Safran). The funds' mission is to assist first and second tier subcontractors in consolidating and developing their business.

About FSI

FSI is a joint stock company owned by Caisse des Dépôts (51%) and the French State (49%). It is a sophisticated equity investor which holds minority interests in French companies that have industrial projects to create value and introduce competition to the economy.

About Solidarity Fund QFL

With net assets of $6.4 billion as at May 31, 2009 , this development capital fund channels the savings of Quebecers through its registered retirement savings plan (RRSP) into investments in all sectors of the economy to help create and maintain jobs and further Quebec's economic growth. Solidarity Fund QFL is a partner, either directly or through its network members, in 2,000 companies. It currently has nearly 571,000 shareholders and has helped, on its own or with other financial partners, to create, maintain and protect nearly 143,000 jobs in Quebec . For more information, visit www.fondsftq.com.

For further information: Mecachrome: Jocelyn Coté, [phone], [email protected]; Meca Dev/ACE Management/FSI/QFL: Benjamin Perret, [phone], [email protected]; Sacha Mandel, [phone], [email protected]