Vancouver, BC, August 30, 2005--VANCOUVER: Avcorp Industries Inc. (AVP on the Toronto Stock Exchange) today announced that it has negotiated a non-brokered Private Placement of up to 3,200,000 units at a price of $1.00 per unit, to raise gross proceeds of up to $3,200,000.
Private Placement
Each unit of the Private Placement will consist of one common share and one non-transferable share purchase warrant. Two share purchase warrants together will entitle the holder thereof to purchase one common share of the Company at $1.20 per share for a 12-month period, from the closing date. The proceeds of the financing will be used for general working capital purposes. Certain Insiders, Directors and Officers may subscribe for a portion of this placement. The financing is subject to regulatory approval.
Debenture Extension
Pursuant to agreements with all of the holders of the Series A Secured Debentures, (the "Debentures") the Debenture term has been extended to March 31, 2008. In consideration of the extension debenture holders granted priority to the increased banking facility as previously announced on August 18, 2005. The conversion price of the Debentures will be reduced to $1.50 for calendar year 2006 and $2.00 for calendar year 2007 subject to regulatory approval and the interest rate will increase from 8.75% to 9.25% effective October 1, 2005 for the balance of the term.
Avcorp has successfully absorbed 153 new employees over the past 6 months increasing its number of employees from a low of 491, to a current level of approximately 580. While training and learning curve costs have impacted profitability, management is confident that ongoing improvements will allow the Company to meet or exceed its objectives.
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 over 40 years of experience, more than 580 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.
PAUL KALIL
PRESIDENT
Contact: Sheryl Brecknell, Investor Relations 604-587-4921