Vote could take Shermag private
By Michael J. Knell -- Furniture Today, March 1, 2010
SHERBROOKE, Quebec —
Shermag shareholders will meet in Montreal March 25 to vote on taking the company private, as proposed by the manufacturer's new majority owner.
The company also said it plans to file its financial statements for its fiscal years ending April 2009 and April 2008, as well as its statements for the quarters ended in July and October of last year. The materials will be filed with regulators and will be sent to shareholders before the meeting.
Shermag wasn't required to file financial statements while it was operating under the court-ordered provisions of the Company's Creditors Arrangement Act. It emerged from that protection in October when it was taken over by a new majority owner, Bermex Group, the Maskinongé, Quebec-based parent company of case goods specialists Bermex, Dinec and Mi-Di.
“The annual and quarterly financial statements indicate that Shermag's financial situation remains precarious and that its operations are still unprofitable,” Shermag said in a statement. “The restart initiatives of Shermag by Groupe Bermex Inc. will inevitably bring on cost reductions and major changes with Shermag's business process and strategic positioning.”
However, to achieve that, Shermag's board of directors believes the company should be taken private, especially since there is little or no equity left to satisfy the minority shareholders, who now collectively own just over 10.7 million shares or 19.5% of the company.
Under the deal that brought Shermag out of CCAA, Bermex became the majority shareholder with an 80.5% stake in the company. That stake was acquired with the payment of C$1.25 million, which will now be distributed among the remaining shareholders. Each will receive a total of three cents a share.
“Once this reorganization is completed, Groupe Bermex Inc. would be the exclusive holder of voting and participating shares of the company,” Shermag said.
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Shareholders to vote on taking Shermag private
Feb 17, 2010
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