Trailmobile Canada gets additional financing from Tyco Capital

MISSISSAUGA, Ont. (Jan. 11, 2001) — Trailmobile Canada Ltd. said it has secured a $2.5 million credit line with Tyco Capital to help pay for a receiveables charge.

The $2.4 million charge will appear in the first quarter of 2002 relating to a receivable from Trailmobile Trailer Canada Ltd. The “temporary over-advance” will take effect immediately and be in place through April, the company said in a news release.

Trailmobile Canada’s largest shareholder, Trailmobile Corp., has guaranteed an amount equal to any over-advance on the revolving line of credit.

One of the conditions for the over-advance is an equity financing of about $3.5 million, subject to regulatory approval, which must be funded by April 30. Trailmobile Corp. has already pledged about $2 million of the proposed equity financing. Trailmobile Canada said it has also pledged as security, unencumbered collateral with an estimated value of $1.5 million.

“These pledged funds and conveyed collateral have been placed in escrow as security for Tyco Capital who will in turn fund the company and allow us to bring vendor payables to within regular business terms,” said Trailmobile Canada CFO Frank Michalargias.

The company said a projected increase in production as a result of last month’s Chapter 11 filing by Trailmobile Trailer LLC in the United States, coupled with a successful equity financing, should be sufficient to eliminate the company’s over-advance position.