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TMCNet:  Second Independent Proxy Advisory Firm Recommends MFC Shareholders Vote Only on BLUE Proxy FOR Two IAT Nominees and No Management Nominees

[December 18, 2013]

Second Independent Proxy Advisory Firm Recommends MFC Shareholders Vote Only on BLUE Proxy FOR Two IAT Nominees and No Management Nominees

NEW YORK --(Business Wire)--

Mr. Peter R. Kellogg and IAT Reinsurance Company Ltd. (collectively, "IAT") commented on the second major independent proxy advisory firm, Glass Lewis & Co., LLC ("GL"), recommendation for change at MFC Industrial Ltd. (NYSE:MIL) ("MFC"). Shareholders are urged to vote their BLUE proxy before the deadline of Sunday December 22, 2013 in connection with the Annual General and Special Meeting of Shareholders (the "Meeting") of MFC to be held on December 27, 2013 in Hong Kong.

Shareholders who require assistance in voting their BLUE proxy should contact IAT's proxy solicitation agent, Okapi Partners LLC at 1-855-208-8902, mfcinfo@okapipartners.com

In its report, GL wrote that:

"…we believe it's more than possible that some, if not all, other [MFC] directors may be aligned with Mr. Smith and management in a manner that conflicts with their fiduciary duty to represent all MFC shareholders."

GL recommended shareholders vote only on IAT's BLUE proxy FOR IAT nominees, Logan W. Kruger, and Patrice E. Merrin, for the board of MFC, concluding that "…we believe the Dissident has raised a number of strategic and governance related concerns at MFC, making a compelling case that change is needed at the board level."

GL did not recommended voting for any of MFC's director nominees.

"We are pleased that a second independent proxy advisory firm has echoed our concerns about the current board's strategic and governance failures, and recommended MFC shareholders vote only the BLUE proxy. The nominees proposed by IAT, offer shareholders the opportunity for meaningful change, and truly independent and qualified oversight of management," said Peter Kellog, CEO of IAT.

In its report, Glass Lewis also highlighted several strategic and shareholder issues at MFC also expressed by IAT including:

  • GL wrote that "…the current leadership team has been unable to generate positive returns whatsoever for MFC shareholders over the last 1-, 3- and 5-year periods ending Dec. 13, 2013… it's clear to us that the Company's shareholder returns over most recent and relevant periods have significantly lagged the average returns of peers."
  • GL noted that "Mr. Smith serves as Chairman, CEO, President and CFO of the company…[an] arrangement fraught with conflicts of interest and, in our view, results in less effective management, stewardship and accountability."
  • GL noted "…virtually all mergers and acquisitions, including the six in which MFC was the buyer during the last three years…still fail to increase shareholder value."
  • Further GL echoed IAT's assertion that "…the board needs to further refine the Company's strategy and take action to continue to shed non-core assets and facilitate the development and monetization of core assets, as suggested by IAT."

Two is Not Enough for Change

The current board of MFC has failed miserably in supervising management. MFC cannot continue to be run as Michael Smith's (News - Alert) private fiefdom. We need the board to be in the hands of a majority of independent directors and only the IAT nominees can offer that to shareholders.

The IAT nominees are independent from MFC's management, each other, and with the exception of Peter Kellogg, independent from IAT. They are what MFC requires in order to refine and effectively execute on its strategy and to unlock long-term value for all shareholders. The IAT nominees will bring those long missing skills to MFC's board and provide shareholders with the best opportunity for meaningful change and lasting value creation.

Shareholders deserve a board where good governance, good disclosure practices, accountability and transparency are the norm, not the exception. The IA nominees as independent stewards will implement those practices if elected to MFC's board.


The choice before shareholders is CEO Michael Smith's board of ineffective directors who, according to GL, "…may be aligned with Mr. Smith and management in a manner that conflicts with their fiduciary duty to represent all MFC shareholders", or IAT's nominees, who will bring true independent oversight and meaningful change to MFC.

It's Time for Action - It's Time for a Change

IAT believes shareholders deserve more and urges shareholders to say it is a time for change at MFC and vote their BLUE proxy FOR all IAT nominees.

We expect the current board will continue to attempt to distract shareholders from their abject failure to create shareholder value. The only question before shareholders is whether the current board or the IAT nominees are the best choice for generating shareholder returns.

Please cast your vote on the BLUE proxy today in support of all eight of the IAT Nominees and disregard any materials you may receive from MFC. We urge you to vote the BLUE form of proxy so that it is received by Okapi Partners LLC prior to 5:00 p.m. (New York time) on Sunday, December 22, 2013.

Even if you have previously deposited a white proxy or given voting instructions in support of MFC board nominees, you may still change your vote and support the IAT Nominees by voting your BLUE proxy or voting instruction form.

If you require assistance in casting your vote, or require replacement proxy materials, please call IAT's proxy solicitation agent, Okapi Partners LLC at 1-855-208-8902mfcinfo@okapipartners.com

To keep current with further developments, shareholders of MFC can visit:
www.timeforchangeatMFC.com

About IAT

IAT is a Class 3-A Bermuda-domiciled reinsurer. IAT's head office is located at 48 Wall Street, 30th Floor, New York, NY 10005. IAT is an active underwriter of commercial and personal lines property and casualty reinsurance and insurance, directly and through its eight wholly-owned insurance subsidiaries domiciled and licensed in the US.

Notice to United States Shareholders

This solicitation is not subject to the requirements of Section 14(a) of the United States Securities Exchange Act of 1934, as amended (the "U.S. Exchange Act"). Accordingly, this solicitation is made in the United States with respect to securities of MFC in accordance with Canadian corporate and securities laws and this press release has been prepared in accordance with disclosure requirements applicable in Canada. Shareholders of MFC in the United States should be aware that these Canadian requirements are different from the requirements applicable to proxy statements under the U.S. Exchange Act.

Forward-looking Statements and Information

Certain information included in, attached to or incorporated by reference into, this press release, may contain forward-looking statements or forward-looking information within the meaning of applicable securities laws, including in respect of IAT's and MFC's respective priorities, plans and strategies for MFC and MFC's anticipated financial and operating performance and business prospects. All statements and information, other than statements of historical fact, included or incorporated by reference in this press release are forward-looking statements and forward-looking information, including, without limitation, statements regarding activities, events or developments that IAT expects or anticipates may occur in the future. Such forward-looking statements and other information in this press release are based on publicly disclosed information relating to MFC and we disclaim the accuracy and completeness of such information. These forward-looking statements and information can be identified by the use of forward-looking words such as "will", "expect", "intend", "plan", "estimate", "anticipate", "believe" or "continue" or similar words and expressions or the negative thereof. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements and information are based will occur or, even if they do occur, will result in the plans, results or performance expected.

IAT cautions readers of this press release not to place undue reliance on forward-looking statements and information contained in this press release, which are not a guarantee of performance, events or results and are subject to a number of risks, uncertainties and other factors that could cause actual results, performance or events to differ materially from those expressed or implied by such forward-looking statements or information. These factors include: changes in strategies, plans or prospects; general economic, industry, business and market conditions; changes in management and board composition; actions of MFC and its subsidiaries or competitors; the ability to implement business strategies and plans and pursue business opportunities and conditions in the commodity supply chain industry; the availability and pricing of commodities; the effects of competition and pricing; risks associated with volume growth and pricing; industry capacity and fluctuations in market supply and demand; inflationary pressures, including increasing utility and fuel prices; potential increases in maintenance and operating costs; potential legal and regulatory claims, proceedings or investigations; ability to realize any anticipated or planned cost savings; disruptions or changes in the credit or securities markets; risks and liabilities associated with financing, producing, sourcing, processing, transporting and storing commodities; timing of completion of capital and maintenance projects; changes in applicable laws and regulations; foreign currency and interest rate fluctuations; labour strikes or lock-outs or unexpected changes in labour productivity; and various other events that could disrupt MFC's operations, including severe or unusual weather conditions, droughts, floods, avalanches, earthquakes, war, acts of terrorism and security threats. MFC's shareholders are cautioned that all forward-looking statements and information involve known and unknown risks and uncertainties, including those risks and uncertainties detailed in the continuous disclosure and other filings of MFC with applicable U.S. and Canadian securities commissions, copies of which are available on EDGAR at www.sec.gov and SEDAR at www.sedar.com. IAT urges you to carefully consider those factors.

The forward-looking statements and information contained in this press release are expressly qualified in their entirety by this cautionary statement. The forward-looking statements and information included in this press release are made as of the date of this press release and IAT undertakes no obligation to publicly update such forward-looking statements or information to reflect new information, subsequent events or otherwise, except as required by applicable laws.


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