July 18, 2005

EMS to sell off WasteCo and Quebec composting operation

Environmental Management Solutions (EMS) has signed letters of intent for the sale of WasteCo Environmental Services and the company's 71% ownership position in Les Composts du QuÈbec. Both sales were approved by the EMS board of directors following recommendations made by a special committee created by the board to review strategic directions for the company. The transactions are expected to close on or about August 1, 2005.

Proceeds will be used to strengthen the company's working capital position, improve trade creditor relationships, reduce secured debt, and facilitate the arrangement of a new bonding facility. EMS previously discontinued or sold off several other non-core operations, including K-Lor's civil contracting business, Cannington Excavating, Rom-Neg Construction and Greenbank Environmental.

"The sale of WasteCo and Composts du QuÈbec...should stabilize the cash flow position of the company in the short-term and provide us access to the required debt markets," noted EMS president and CEO Tony Busseri. He added that the firm's business model will not change, only that its focus will be on the eastern Canadian marketplace.

WasteCo Environmental Services serves the oil and gas, industrial and manufacturing sectors in western Canada, providing environmental and waste management services such as provides soil recycling, transfer and fuel blending, site remediation, and drilling waste disposal. Created in 1996, WasteCo was acquired by EMS in November 2003.

Les Composts du QuÈbec specializes in composting, and has been processing urban organic wastes (grass clippings and leaves), industrial wastes (paper and agribusiness residues), and farming wastes (manures) since its inception in 1979. The company operates three composting sites and was purchased by EMS in March 2004 by EMS as part of its GSI Environnement acquisition.

Meanwhile, the Ontario Superior Court of Justice has rejected an application brought by former chairman and CEO Frank D'Addario seeking an independent audit of the results of voting at the company's annual and special meeting of shareholders on April 29, 2005.

The application also sought to stop EMS from pursuing corporate actions which could strengthen its financial and strategic position, including asset sales, debt restructuring or the issue of new equity. At the meeting, shareholders elected the current board of directors and rejected nominees proposed by dissident shareholders led by D'Addario.

In his reasons for decision, Mr Justice Campbell concluded that the information provided during the hearing confirmed that EMS and its board of directors acted appropriately and that there was no clear evidence that the votes called into question by D'Addario would have changed the outcome of the shareholder meeting.

More information is available from Tony Busseri at EMS, 905/335-2100.

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