VANCOUVER: Avcorp Industries Inc. (AVP on the Toronto Stock Exchange) (the Company) announces that, further to requirements of the Toronto Stock Exchange (TSX) in connection with the Company’s proposed private placement of up to $12,000,000 of 9.25% 5-year convertible preferred shares (Preferred Shares) announced on June 2, 2006, the Company has obtained the written consent of a majority of its shareholders to the terms of the placement prior to closing.
Under TSX policies, the Company is required to obtain majority shareholder approval because the total number of common shares issuable on conversion of the Preferred Shares (assuming all of the Preferred Shares are placed and then converted into common shares) exceeds 25% of the current number of common shares outstanding. The Company has been permitted by the TSX to obtain such approval by way of written majority consent and is required to disseminate this news release in connection therewith.
A total of 35% of the Preferred Shares are expected to be purchased by insiders of the Company. As part of this financing, $7.0 million of existing convertible secured subordinated debentures (60% of which are held by insiders) will be repaid. Under TSX policies, the Company is required to obtain disinterested shareholder approval if the total number of common shares issuable on conversion of the Preferred Shares to insiders (assuming all of the Preferred Shares are placed and then converted into common shares) exceeds 10% of the current number of common shares outstanding. If necessary, one of the insiders has agreed to not convert the number of Preferred Shares that would result in the issuance of common shares in excess of 10% of the number outstanding at closing until such time as disinterested shareholder approval is obtained.
About Avcorp
Avcorp Industries Inc. designs and builds major airframe structures for some of the world’s most respected aircraft companies, including Bombardier, Boeing and Cessna. With 50 years of experience, more than 600 skilled employees and a 300,000 square foot facility near Vancouver, Canada, the company’s depth and breadth of capabilities are unique in the aerospace industry for a company of its size. Avcorp is a Canadian public company traded on the Toronto Stock Exchange.
More information is available at www.avcorp.com.
MICHAEL SCHOLZ
CHAIRMAN
Contact: Sheryl Brecknell, Investor Relations, 604-587-4921