Canyon Services Group Inc. (TSX:FRC) amends its credit facilities

CALGARY, June 4 /CNW/ - Canyon Services Group Inc. today announced that it has amended its credit agreement (the "Agreement") with its existing lender to update and restate the existing Extendible Facility and Operating Facility, and to add a non-revolving extendible term facility (the "Term Facility") in the amount of $11.4 million. The proceeds from the Term Facility will be used to pay off Canyon's capital leases and to pay down its revolving credit facilities. These amendments result in additional debt capacity and a reduction in debt service costs of approximately $2.1 million per annum.

Canyon's credit facilities are now comprised of an $11.4 million Term Facility, a $20.0 million Extendible Facility, a $5.0 million Operating Facility and automotive equipment loans. Canyon's total and net debt remain unchanged with the new Agreement. Proforma the amendment, Canyon has a total of $10.6 million of capacity available to meet the Company's working capital and capital expenditure requirements.

The Company's capital program for 2008, estimated at $4.0 million, includes transportation and storage equipment associated with increased activity out of its Grande Prairie operating base. These expenditures are expected to be incurred in the second half of 2008.

Under the Agreement, the new Term Facility bears interest at the bank's prime lending rate plus 0.75 percent and is repayable by way of blended monthly principal and interest payments based on a 20 year amortization period. The Term Facility matures on May 30, 2010 and can be extended at the lender's option for successive two year periods from the then current term maturity date. Security for the Term Facility is a mortgage over the Company's land and buildings and a general security agreement over all of the Company's assets.

The terms of the $20.0 million Extendible Facility ($14.4 million drawn proforma the amendment) and the $5.0 million Operating Facility ($nil drawn proforma the amendment) remain unchanged. The Extendible Facility is subject to renewal on May 29, 2009 at which time it can be extended at the lender's option for 364 days, while the Operating Facility continues to be a demand revolving facility.

We seek safe harbor.

Contacts

Brad Fedora
President
Canyon Technical Services Ltd
No.1600
510-5th St. S.W.
Calgary
Alberta
T2P 3S2
Phone (403) 290-2491
Fax (403) 355-2211

Or Barry O'Brien
Vice President
Finance and CFO
Canyon Technical Services Ltd
No.1600
510-5th St. S.W.
Calgary
Alberta
T2P 3S2
Phone (403) 290-2478
Fax (403) 355-2211