2009-07-21_private statement

Avcorp Closes Private Placement

July 21, 2009

VANCOUVER: Avcorp Industries Inc. (“Avcorp”) (TSX: AVP) announced today that it has closed a private placement of 16,157,465 common shares of Avcorp at a price of C$0.15 per share to Panta Holdings B.V. (“Panta”) for gross proceeds of C$2,423,620 (the “Private Placement”), pursuant to the terms of the amended and restated investment agreement dated July 13, 2009 (“Amended and Restated Investment Agreement”).

The proceeds from the Private Placement will be used to repay a bridge loan of approximately C$1.5 million plus accrued interest, advanced by Panta on June 15, 2009 and a shareholder loan owing to Michael Scholz, a former director of the Company, in the principal amount of C$400,000 plus accrued interest, with the remaining funds used as working capital. Following completion of the Private Placement, Panta owns approximately 33.3% of the outstanding common shares of Avcorp.

Under the terms of the Amended and Restated Investment Agreement, Avcorp has also agreed to undertake a prospectus rights offering pursuant to which its shareholders (including Panta) will, for each share held, be entitled to subscribe for 2.5 additional common shares of Avcorp at a price of C$0.06 per share (the “Rights Offering”). Panta has committed to purchase any common shares not otherwise subscribed for under the Rights Offering (the “Standby Commitment”). In consideration for the Standby Commitment, Panta will receive the right to purchase, at a price of C$0.06 per share, additional common shares equal to 10% of the total number of common shares issuable under the Rights Offering to shareholders other than Panta (the “Standby Fee”). If the Rights Offering is fully subscribed, Panta will own 64,629,861 common shares of Avcorp following completion of the Rights Offering (representing approximately 36.4% of Avcorp’s issued and outstanding common shares). If no shareholders other than Panta participate in the Rights Offering, Panta will own up to 145,417,183 common shares of Avcorp following completion of the Rights Offering (representing approximately 81.8% of Avcorp’s issued and outstanding common shares).

Pursuant to the terms of the Amended and Restated Investment Agreement, Panta now has the right to nominate one person to the board of directors of Avcorp.

About BAE Systems
BAE Systems is a global defence, security and aerospace company with approximately 100,000 employees worldwide. The Company delivers a full range of products and services for air, land and naval forces, as well as advanced electronics, security, information technology solutions and customer support services. In 2010 BAE Systems reported sales of £22.4 billion (US$ 36.2 billion) and customers in more than 100 countries.

About Avcorp
Avcorp designs and builds major airframe structures for some of the world’s leading aircraft companies, including Boeing, Bombardier, BAE Systems and Cessna. With more than 50 years of experience, 483 skilled employees and 354,000 square feet of facilities, Avcorp offers integrated composite and metallic aircraft structures to aircraft manufacturers, a distinct advantage in the pursuit of contracts for new aircraft designs, which require lower-cost, light weight, strong, reliable structures. Avcorp is a Canadian public company traded on the Toronto Stock Exchange (TSX:AVP).

Contact:
Sandi DiPrimo, Investor Relations Contact | 604-587-4938
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