Common Stock Listed
Toronto
Trading Symbol: AVP
VANCOUVER, Nov. 19, 2012 /CNW/ - Avcorp Industries Inc. (TSX: AVP) (the
"Company" or "Avcorp") is pleased to report that it has received the
determination of an appointed arbitration panel constituted to
adjudicate outstanding issues relating to cost reimbursements and
compensation payable to Avcorp in connection with the transition of
Cessna Aircraft Company ("Cessna") production work back to Cessna and
other suppliers. The transition of Cessna production work was first
announced by the Company on December 17, 2010 and immediately following
notification by Cessna, the Company had attempted to negotiate
compensation payments as contemplated by the Cessna Strategic Alliance
Agreement (the "SAA"). Only when negotiations and mediation were
unsuccessful did the Company refer the matter to binding arbitration.
The binding arbitration award, delivered to the Company on November 16,
2012, determined that: the SAA was an exclusive agreement between
Cessna and Avcorp; Cessna could not unilaterally transition production
work from Avcorp; Avcorp had fulfilled the requirements of the SAA;
and, Avcorp suffered damages as a result of Cessna transitioning
production work from Avcorp. In addition, all counterclaims that were
advanced by Cessna were denied. The quantum of damages was assessed by
the arbitration panel at USD 27,391,372, which amount is payable to
Avcorp within 30 days of the arbitration award.
About Avcorp
Avcorp designs and builds major airframe structures for some of the
world's leading aircraft companies, including BAE Systems, Boeing, and
Bombardier. With more than 50 years of experience, over 400 skilled
employees and 354,000 square feet of facilities in Delta BC and
Burlington ON, Avcorp offers integrated composite and metallic aircraft
structures to aircraft manufacturers, a distinct advantage in the
pursuit of contracts for new aircraft designs, which require
lower‐cost, light weight, strong, reliable structures. Our Burlington
location also offers composite repairs for commercial aircraft. Avcorp
is a Canadian public company traded on the Toronto Stock Exchange
(TSX:AVP).
(signed)
MARK VAN ROOIJ
PRESIDENT and CHIEF EXECUTIVE OFFICER
Forward-Looking Statements
This management discussion and analysis should be read in conjunction
with the Company's audited financial statements. Certain statements in
this report and other oral and written statements made by the Company
from time to time are forward-looking statements, including those that
discuss strategies, goals, outlook or other non-historical matters; or
projected revenues, income, returns or other financial measures. These
forward-looking statements are subject to risks and uncertainties that
may cause actual results to differ materially from those contained in
the statements, including the following: (a) the ability of the
Company to renegotiate its debt agreements under which it is in
default; (b) the extent to which the Company is able to achieve savings
from its restructuring plans; (c) uncertainty in estimating the amount
and timing of restructuring charges and related costs; (d) changes in
worldwide economic and political conditions that impact interest and
foreign exchange rates; (e) the occurrence of work stoppages and
strikes at key facilities of the Company or the Company's customers or
suppliers; (f) government funding and program approvals affecting
products being developed or sold under government programs; (g) cost
and delivery performance under various program and development
contracts; (h) the adequacy of cost estimates for various customer care
programs including servicing warranties; (i) the ability to control
costs and successful implementation of various cost reduction programs;
(j) the timing of certifications of new aircraft products; (k) the
occurrence of further downturns in customer markets to which the
Company products are sold or supplied or where the Company offers
financing; (l) changes in aircraft delivery schedules or cancellation
of orders; (m) the Company's ability to offset, through cost
reductions, raw material price increases and pricing pressure brought
by original equipment manufacturer customers; (n) the availability and
cost of insurance; (o) the Company's ability to maintain portfolio
credit quality; (p) the Company's access to debt financing at
competitive rates; and (q) uncertainty in estimating contingent
liabilities and establishing reserves tailored to address such
contingencies.
SOURCE: Avcorp Industries Inc.