Shermag's plan of arrangement approved by its creditors

• Press Release
• Source: SHERMAG INC.
• On 10:50 am EDT, Thursday September 10, 2009

SHERBROOKE, QC, Sept. 10 /CNW Telbec/ - Shermag Inc. (TSX:SMG - News) and its subsidiaries (the "Company") today announced that its plan of arrangement (the "Plan") has been duly accepted by its creditors during a meeting of creditors held today in conformity with the Companies' Creditors Arrangement Act (the "CCAA").

The Plan provides that, pursuant to a transaction to take place no later than October 16, 2009, approved by the Québec Superior Court on August 12, 2009, le Groupe Bermex Inc., will, in furtherance to the approval of the Plan by the creditors and by the Court, invest the settlement amount of $1,250,000. The Plan is available on the Monitor's Website (www.rsmrichter.com).

Therefore, on September 15, 2009, the Company will present a motion to sanction the Plan before the Québec Superior Court. This is a very important step for the reorganization of the Company.

Shermag has been operating under the protection of the CCAA since May 5, 2008 and obtained from the Québec Superior Court an extension of the stay of proceedings against Shermag and its subsidiaries until October 16, 2009. RSM Richter Inc. is the Court appointed Monitor for the CCAA proceedings.

Profile

Shermag Inc., headquartered in Sherbrooke, Québec, designs, produces, markets and distributes high-quality residential furniture. Shermag presently has 219 active employees and is a manufacturer and importer with its manufacturing operations and global sourcing division.

Disclaimer

This news release contains forward-looking statements about the Company's operations, objectives, strategies, financial situation and performance. These statements are made based on assumptions and management's best estimates with regard to future events. However, the business of the Company is subject to risks and uncertainties that could cause actual results to differ from expected results. Important factors that could cause such differences are changes in pricing pressure being exerted by competitors, particularly Asian-based companies, or significant movement in the Canadian/US dollar exchange rate. This is not an exhaustive list. A broader evaluation of risk factors that could affect future performance can be found in the Company's Annual MD&A and Annual Information Form, filed with Canadian securities regulatory authorities. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For further information

Shermag Inc., (819) 566-1515

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