CHICAGO, ILLINOIS - January 29, 2012, Northstar Aerospace, Inc. (NAS:TSX) (the "Corporation") announced today that it has received a notice from a major customer claiming breach of its obligations under certain contracts. This notification demands that the Corporation must cure such breach or otherwise resolve the claims within ten days. The Corporation is evaluating the claims to determine the appropriate course of action and intends to review all alternatives to protect its position.
As previously disclosed in the notes to the Corporation's interim financial statements as of September 30, 2011, various uncertainties raise significant doubt about the Corporation's ability to continue as a going concern. The Corporation has been unsuccessful to date with its efforts to amend customer contracts. Furthermore, at this time, the Corporation expects to be in violation of its financial covenants as of January 31, 2012. The Corporation continues in discussions with its lenders to amend its credit agreement to provide sufficient credit to maintain its ongoing operations. No assurances can be given that these matters will be satisfactorily resolved.
Northstar Aerospace, Inc. (www.nsaero.com) is North America's leading independent manufacturer of flight critical gears and transmissions. Northstar Aerospace is a public company (TSX:NAS) with operating subsidiaries in the United States and Canada. Its principal products include helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of components and transmissions. The Company's executive offices are located in Chicago, Illinois. Its plants are located in Chicago, Illinois; Phoenix, Arizona; Milton and Windsor, Ontario, Canada.
Forward Looking Statements
This press release contains forward-looking statements that are subject to risks and uncertainties. All statements, other than statements of historical fact included in this press release, including the statements in the press release relating to the notice received under the Corporation's customer contracts and the action that the Corporation intends to take in response thereto, the statements relating to the Corporation's compliance with its financial covenants and on-going discussions and negotiations with its lenders and the statements relating to the Corporation's financial position and ability to continue as a going concern may be or include forward-looking statements. Forward-looking information contained herein is based upon a number of assumptions and actual future events may differ materially depending on a variety of factors, including the Corporation's ability to cure or resolve claimed breach of obligations under customer contracts and its ability to successfully amend its credit agreement. Other important factors that could cause actual results to differ materially from the Corporation's expectations (together with the cautionary statements in the previous sentence, "Cautionary Statements") are included in the Corporation's Consolidated Financial Statements for the Years Ended December 31, 2010 and 2009 - Management's Discussion and Analysis - Risks and Uncertainties, the Corporation's Annual Information Form filed on March 25, 2011, under the heading of Risks and Uncertainties, the Corporation's Consolidated Interim Financial Statements for the three and nine months ended September 30, 2011, and 2010 under the heading Basis Of Preparation And Adoption Of IFRS - Going Concern and in the related Management's Discussion and Analysis under the heading Risks and Uncertainties and the heading Going Concern. Although the Corporation believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to have been correct. All information contained in this press release and subsequent written and oral forward-looking statements attributable to the Corporation or persons acting on behalf of the Corporation are expressly qualified in their entirety by the Cautionary Statements. The Corporation disclaims any intentions or obligation to update or revise any forward looking statements or comments as a result of any new information, future event or otherwise, unless such disclosure is required by law.
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