For more information visit: www.cinram.com
Unedited press release follows:
Cinram Announces Launch of Proposed Amendment to its Credit Agreements
TORONTO, Aug. 10, 2011 – Cinram International Income Fund (TSX: CRW.UN) (together with its subsidiaries, “Cinram” or the “Fund”) today announced that it has formally made a proposal to its lenders to amend certain terms of its senior secured credit agreements. The proposal was negotiated with representatives of, and is supported by members of Cinram’s lenders’ steering committee.
The proposed amendment would revise the financial covenants with which Cinram must comply under the terms of its credit agreements, including those governing leverage and interest coverage. The revisions would apply through 2012, in order to address the negative impact resulting from the adverse conditions experienced in the first half of 2011. Other key terms of the proposed amendments include modifications to the covenants with respect to certain expenditures, increased pricing on the first and second lien debt and revolving line of credit, and a commitment to appoint additional board members and financial advisors.
The proposed amendments are designed to support Cinram’s continuing initiatives to grow the business of the Fund and create value for its stakeholders.
The Fund is confident that, given the support of members of the lenders’ steering committee, the approval of the lenders will be obtained. However, there can be no assurance that the proposed amendments will be approved. If not approved it is expected that the Fund will not be in compliance with its financial covenants for its second quarter and future periods, which would result in a default under the terms of those agreements.
Cinram International Inc., an indirect, wholly-owned subsidiary of the Fund, is one of the world’s largest providers of pre-recorded multimedia products and related logistics services. With facilities in North America and Europe, Cinram International Inc. manufactures and distributes pre-recorded DVDs, audio CDs, and CD-ROMs for motion picture studios, music labels, publishers and computer software companies around the world. Cinram now also provides distribution and logistics services to the telecommunications industry in North America through its wireless subsidiaries. The Fund’s units are listed on the Toronto Stock Exchange under the symbol CRW.UN. For more information, visit our website at www.cinram.com.