Skip to content

Cinram May Default on Credit Agreements

Cinram International Income Fund announced that it is asking its lenders to amend certain terms of the company’s Senior Secured Credit agreements.

For more information visit:

Unedited press release follows:

Cinram in Discussions with Lenders

TORONTO, Aug. 2, 2011 – Cinram International Income Fund (TSX: CRW.UN) (together with its subsidiaries, “Cinram” or the “Fund”) today announced that it is in discussions with its lenders to amend certain terms of its Senior Secured Credit agreements.

The discussions principally aim to revise financial covenants with which Cinram must comply under the terms of its credit agreements, including those governing leverage and interest coverage.

The Fund’s revenues and EBITA (earnings (loss) from continuing operations before impairment charges, net finance costs (including interest expense, foreign exchange translation gains/losses, investment income and change in fair value of derivatives), income taxes and amortization) for the second quarter of 2011 have been negatively impacted by generally adverse conditions experienced in the entertainment industry in the first half of 2011. It is expected that these factors will result in the Fund not being in compliance with its financial covenants for its second quarter and future periods.  In the absence of an amendment to its credit agreements, failure to meet the covenants would constitute a default under the terms of those agreements. Although discussions are underway and are at an advanced stage there can be no assurance that the proposed amendments will be approved.

The Fund expects that its second lien secured debt will be mandatorily exchanged in accordance with its terms on December 31, 2011.

About Cinram
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