NEW YORK, June 9, 2017 /PRNewswire/ -- MFC Bancorp
Ltd. ("MFC" or the "Company") (NYSE: MFCB) announced today that the
Supreme Court of British Columbia
(the "Court") has issued an interim order authorizing, among other
things, a special meeting (the "Meeting") of the holders of all of
the issued and outstanding common shares of the Company (the "MFC
Shares") to seek approval for a plan of arrangement (the
"Arrangement") under the Business Corporations Act
(British Columbia), which was
previously announced by the Company in its news release dated
March 31, 2017. Pursuant to the
Arrangement, among other things:
- Share Consolidation/Split. The MFC Shares will be
consolidated on a 100 for 1 basis, with any resulting fractional
shares being eliminated and the registered holders (i.e.
shareholders who hold their MFC Shares in registered form and not
beneficially through a broker or other intermediary) of the same
being paid therefor in cash based upon the weighted average price
of the MFC Shares over the ten trading days immediately prior to
the Arrangement becoming effective and, thereafter, such MFC Shares
will be split on a 1 for 20 basis;
- Share Capital. MFC's stated shareholders' capital
will be reduced by an amount equal to its retained deficit;
and
- Share Exchange. Each MFC Share outstanding
after the completion of the above consolidation and split, will be
exchanged for: (i) a common share of US$0.001 par value (a "New MFC Share") in the
capital of MFC 2017 Ltd., a new wholly-owned subsidiary of MFC that
was formed under the laws of the Cayman
Islands ("New MFC") for the purposes of the Arrangement; and
(ii) US$0.0001 per share in
cash.
Upon completion of the Arrangement, MFC shareholders will
become shareholders of New MFC, which will be the public
parent company of the MFC group. Upon or prior to the completion of
the Arrangement, New MFC will be renamed "MFC Bancorp Ltd.". The
Company expects that upon completion of the Arrangement, the New
MFC Shares will be listed on the New York Stock Exchange ("NYSE")
under the Company's existing symbol "MFCB" without
interruption.
The Meeting is currently scheduled to be held on July 10, 2017 at 10:00
a.m. (Vancouver time) at
1000 Cathedral Place, 925 West Georgia Street, Vancouver, British Columbia, and the record
date for determining registered shareholders entitled to receive
notice of and attend and vote at the Meeting is May 17, 2017.
The Company believes that the benefits of the Arrangement are,
among other things:
- Stable and Reputable Jurisdiction. The board of
directors of MFC chose the Cayman
Islands as the jurisdiction for New MFC as it has enjoyed a
long history of political and economic stability. The Cayman Islands is also recognized as a
well-developed international business and financial center with a
large number of public companies incorporated within such
jurisdiction. The legal system of the Cayman Islands is generally based on the
English common law system.
- More Flexible Corporate Structure. The separation
of the public parent company from its operating businesses will
help facilitate any future strategic transactions, such as
spin-offs and corporate reorganizations as well as provide
additional options for future financing structures available to New
MFC and MFC.
- Additional Fiscal Flexibility. By being located in an
international financial center, New MFC will have enhanced
flexibility with respect to fiscal and tax planning. By completing
the Arrangement, New MFC will be able to take advantage of the
favourable treatment accorded to non-resident exempted companies
under Cayman Islands law.
Currently, the Cayman Islands has
no corporate income, dividends or capital gains taxes and no
withholding taxes on distributions to shareholders.
- Reduced Compliance Expenses and Cash Proceeds for Odd Lot
Interest Shareholders. MFC believes that by completing
the Arrangement, it can achieve a reduction in ongoing
administrative costs and allow registered holders of less than 100
MFC Shares to receive cash for their MFC Shares without incurring
brokerage commissions or expenses.
- Enhanced Global Exposure. MFC is a global company, with
operations spanning internationally. The MFC Shares are not listed
or traded on any Canadian markets and less than 1% of the MFC
Shares are estimated to be held by Canadian shareholders.
Accordingly, New MFC's jurisdiction of incorporation of the
Cayman Islands, a recognized
international financial center, is more reflective of the
international nature of MFC's operations. Further, through the
potential secondary listing of the New MFC Shares on an
international stock exchange after completion of the Arrangement,
New MFC may obtain additional global exposure and liquidity for the
New MFC Shares.
Due to the administrative costs of issuing and mailing cash
payments to registered MFC shareholders under the Arrangement, cash
payments of less than US$10.00 under
the Arrangement will not be made to such registered
shareholders.
The Arrangement is being carried out pursuant to an amended and
restated arrangement agreement (the "Arrangement Agreement") dated
June 7, 2017 among the Company, New
MFC and MFC 2017 II Ltd., a wholly-owned subsidiary of New MFC, and
is subject to customary conditions, including the receipt of
requisite court and approval by at least
662/3% of the votes cast by shareholders
present in person, or by proxy, and entitled to vote at the
Meeting. If such conditions are satisfied, the Company currently
anticipates that the Arrangement will be completed on or about
July 14, 2017. If the Arrangement is
approved by shareholders at the Meeting, the Company will attend a
hearing before the Court, currently scheduled for July 12, 2017, to ask the Court to grant a final
order in respect of the Arrangement.
Details regarding the terms of the Arrangement are set out in
the Arrangement Agreement and management information circular to be
sent to holders of MFC Shares in connection with the Meeting (the
"Circular"), each of which will be available under the Company's
profile on SEDAR at www.sedar.com and EDGAR at www.sec.gov.
Shareholders are urged to carefully review the Circular and
accompanying materials as they contain important information
regarding the Arrangement and its consequences for
shareholders.
Shareholders are urged to consult their financial and tax
advisors regarding the particular consequences of the Arrangement
in their situation, including, without limitation, the specific
implications of thereof and the applicability and effect of any
federal, state, local and foreign tax laws.
About MFC
MFC is a merchant bank that provides financial services and
facilitates structured trade for corporations and institutions. We
specialize in markets that are not adequately addressed by
traditional sources of supply and finance, with an emphasis on
providing solutions for small and medium sized enterprises. We
operate in multiple geographies and industries.
As a supplement to our operating business, we commit proprietary
capital to assets and projects where intrinsic values are not
properly reflected. These investments can take many forms, and our
activities are generally not passive. The structure of each of
these opportunities is tailored to each individual transaction.
Cautionary Statement and Forward-Looking Information
This press release includes forward-looking information and
forward-looking statements (together, "forward-looking
information") within the meaning of applicable Canadian and
United States securities laws.
Forward-looking information includes statements: regarding the
Company's beliefs and expectations regarding the completion and/or
timing of the Arrangement; the expected benefits of the
Arrangement; and the listing of the New MFC Shares on the NYSE.
Users of forward-looking information are cautioned that actual
results may vary from the forward-looking information disclosed in
this press release. The material risk factors that could cause
actual results to differ materially from the forward-looking
information contained in this press release include: the risk that
the Company will be unable to obtain all necessary Court,
shareholder, regulatory or other approvals, including NYSE
approval, for the Arrangement; no market may develop for trading
the New MFC Shares; and other risks and uncertainties described
under the heading "Risk Factors" and elsewhere in the Company's
2016 Annual Report Form and other documents filed with Canadian
securities regulators and the SEC.
Readers are cautioned that the assumptions used in the
preparation of forward-looking information, although considered
reasonable at the time of preparation, may prove to be imprecise
and, as such, undue reliance should not be placed on
forward-looking information. The material assumptions used to
develop the forward-looking information include: that the Company
will obtain all necessary consents and approvals, including any
necessary Court, shareholder and/or regulatory approval for the
Arrangement; that the Company will obtain NYSE approval for the
listing of the New MFC Shares; and that other conditions under the
Arrangement will be fulfilled or waived. The Company does not
assume the obligation to update any forward-looking information,
except as required by applicable law.
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SOURCE MFC Bancorp Ltd.