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04. August 2008

Canada - FisherCast Global has been sold to Dynacast Ltd.

"We have signed an asset purchase agreement with FisherCast subject to court approval," Simon Newman, Dynacast's chief executive officer, said. Newman would not reveal the purchase price.

With FisherCast in bankruptcy protection under the Companies Creditors Arrangement Act (CCAA), the Ontario Superior Court of Justice must approve the sale. 

An environmental expert is checking the plant, and there is an "open issue" with the lease of the facility, but Newman said those issues are unlikely to scuttle the agreement.

"We expect those to close," Newman said.

An international firm with an office in Toronto owns the Otonabee Plant on Neal Drive, a Fisher- Cast source told, requesting anonymity.

FisherCast executive vice-president Bob Espey would not comment on the purchase agrement, but said FisherCast would make a statement in the coming days.

With the company mired in financial issues that need to be resolved, Newman said, it's tough to talk about the future of the local plant.

"But we are reasonably confident, assuming the book of business stays at the level it's at, that we can turn this around in a three to six-month period," he said.

"And we are reasonably confident we can grow this business -- particularly in magnesium and injection metal assembly -- and therefore continue to support this business and the community."

The acquisition of FisherCast is an important move for Dynacast, an international manufacturer with sales estimated at $450 million, Newman said.

"It adds a brand, technology, magnesium injection metal assembly and a unique process for small zinc diecasting," he said.

The products manufactured by FisherCast and Dynacast are similar, Newman said.

"But the technology is different. FisherCast is unique, and so are we, but it's a different process.

"The brand Bill Fisher and the family built is very strong and so is the legacy. And the legacy is very important to the community and us."

Dynacast is also currently negotiating an asset purchase agreement with FisherCast's European operations in Wales, U. K., Newman said.

"We are in discussions with the Welshpool Plant as we speak," he said.

"They are somewhat connected and we hope to conclude on that facility in the next two weeks."

The short time in which to make and execute decisions made negotiations with FisherCast and its union difficult, Newman said.

"When the bank tells you it's effectively pulling its funding and you are going to file CCAA, you have to make decisions very, very fast," he said.

Dynacast entered into sales talks with FisherCast on June 4, the day bankruptcy protection was approved.

The layoff of 34 union workers and 15 salary employees on July 23 was the idea of the existing Fisher- Cast management, Newman said.

"They were trying to -- in desperate times -- do whatever they could to make the company financially viable.

"This is something any management team would try and do in an environment like this," Newman said.

"I have told all the employees and the management team, and so have the existing FisherCast management, that the decisions were made based on the best information they had at the time," Newman said. "That's all you can do."

Dynacast also needed specific concessions from the Independent Union of Precision Diecasters (IUPD), which represents Fisher- Cast's hourly employees, Newman said.

"This is a company in bankruptcy. To protect the 160-plus (union) jobs we needed to build our strength and have the flexibility to make decisions," he said.

"Without that flexibility we don't believe we would be able to do some of the things as quickly as we needed to do them and right the ship and protect the main bulk of the employees."

Employee seniority was a "deal breaker" issue for Dynacast, Newman said, explaining the company approached the union stating, "we would like" this concession.

On July 9, union members voted 73 per cent in favour of concessions including the surrender of all seniority rights.

"For us (the concessions) were deal breakers," Newman said.

Without an opportunity to review the asset purchase agreement yesterday, the union executive did not want to comment on the sale.

Dynacast employs about 2,7000 people in 16 plants worldwide and some of their European operations are unionized, Newman said.

"The (IUPD) poses no problems to us at all," Newman said.

"Decisions have to be made, sometimes in terrible circumstances, and the existing Fisher- Cast management team did the best they could in the circumstances that were in front of them," Newman said.

"I would like to try and focus on the employees that are still employed and the business that's still there. And where we feel we can turn this ship around and continue to employ those kinds of levels and/or more as the business grows.

About 200 people are employed at he local plant.

"I know it's hard for people but at the end of the day we have to survive. We want to employ as many people as we can but we need to be as efficient as we can," he said.

"But we are very confident that we can turn this business around in a very short period of time and if growth does happen we can begin to employ more people again."

There is always a chance laid-off employees could be recalled, Newman said.

"But there are too many moving parts in any business, including economic conditions that govern how many people we employ and whether we take people back or not," he said.

"Hopefully in a year from now, a general manager will be talking about the success of the business."

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