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The Allied Defense Group Announces Refinancing of MECAR's Banking Pool in Belgium and Support From Local Government
May 02, 2008 (06:05 AM EDT)
VIENNA, Va., May 2 /PRNewswire-FirstCall/ -- The Allied Defense Group, Inc. announces the extension of its subsidiary, MECAR S.A., existing banking pool arrangement, which was contingent upon the initial approval of The Office Nationale du Ducroire (ONDD), a Belgian governmental agency. The Company also announced, in compliance with American Stock Exchange Rule 610(b), that its financial statements for the fiscal year ended December 31, 2007, included in the Company's Annual Report on Form 10-K filed on March 24, 2008, contained a going concern qualification from its independent registered public accounting firm, BDO Seidman, LLP.
Major General (Ret.) John J. Marcello, President and Chief Executive Officer of The Allied Defense Group, said, "In our public filings, ADG had described the extension of the MECAR banking facility contingent upon Belgian government participation. We are extremely pleased to report we have in fact received the support of the Belgium banking pool and the ONDD.
"As we fully anticipated, MECAR's Bank Group has informed the Company they have approved the arrangement and extended the banking pool coverage until November 30, 2008. By that time our cash position at MECAR is projected to have improved to the point of self-sufficiency. MECAR intends to use the proceeds to procure inventories as it produces on its near-record backlog.
"Our banking partners are actively supporting MECAR. They have extended the guarantees, and have committed to continue the facility with some of the members showing interest in staying in the pool past November. We will continue to explore all avenues to refinance this facility on the most favorable terms available in order to provide long term flexibility to the Company.
"The decision to issue a going concern qualification as explained in the audit opinion provided by BDO Seidman LLP, was based on the losses the Company incurred in 2006 and 2007, and notification from MECAR's banking group members of their intent to terminate the credit facility in early 2008.
"We are pleased that MECAR's bank group has agreed to extend the credit facility. With a contractual backlog of more than $171 million and an unfunded backlog of over $89 million, this is another important step in our business development plan to help Allied Defense offset our reliance on our traditional customers and contribute to our efforts to smooth out the cyclical nature of our ammunition business. This gives us money where and when we need it. We continue to execute on our plan on maximizing shareholder value," concluded Major General Marcello.
About The Allied Defense Group, Inc.
The Allied Defense Group, Inc. is a diversified international defense and security firm which: develops and produces conventional medium caliber ammunition marketed to defense departments worldwide; designs, produces and markets sophisticated microwave security systems; and manufactures battlefield effects simulators and other training devices for the military. For more information, please visit the Company web site: http://www.allieddefensegroup.com .
Certain statements contained herein are "forward-looking" statements as such term is defined in the Private Securities Litigation Reform Act of 1995. Because statements include risks and uncertainties, actual results may differ materially from those expressed or implied and include, but are not limited to, those discussed in filings by the Company with the Securities and Exchange Commission.
For More Information, Contact:
Jim Drewitz, Investor Relations
CONTACT: Jim Drewitz, Investor Relations of The Allied Defense Group,Inc., +1-830-669-2466
Web site: http://www.allieddefensegroup.com/