TORONTO, July 10, 2015 /CNW/ - Genterra Capital
Inc. (GIC – TSX-V) ("Genterra") is pleased to announce that it
has entered into a definitive agreement with its wholly-owned
subsidiary, Genterra Energy Inc. ("Genterra Energy"), to undertake
a plan of arrangement whereby Genterra will spin-off approximately
28% of Genterra Energy to the holders of Genterra's common shares
(the "Genterra Shareholders") other than Genterra's Chairman,
Fred A. Litwin, and members of his
family and their respective associates and affiliates (the "Litwin
Group").
Transaction Details
Pursuant to the Arrangement, common shares of Genterra
("Genterra Shares") held by Genterra Shareholders, other than the
Litwin Group, will be exchanged for cash and, subject to the number
of Genterra Shares held by a Genterra Shareholder, common shares of
Genterra Energy ("Genterra Energy Shares"). If approved and
completed, the Arrangement will result in Genterra Energy being
spun-off as a public company and Genterra being wholly-owned,
directly and indirectly, by the Litwin Group.
Under the terms of the Arrangement, Genterra Shareholders, other
than the Litwin Group, will receive in respect of each Genterra
Share that they hold, the following consideration:
- Each Genterra Shareholder who holds less than 500 Genterra
Shares will receive Cdn$2.25 in cash
for each Genterra Share held; and
- Each Genterra Shareholder who holds 500 Genterra Shares or more
will receive Cdn$1.96 in cash and two
(2) Genterra Energy Shares.
The two (2) Genterra Energy Shares offered as partial consideration
for each Genterra Share held by a Genterra Shareholder who holds
500 Genterra Shares or more represents Cdn$0.29 per Genterra Share based on a Valuation
Report dated June 23, 2015 of
Corporate Valuation Services Limited ("CVS").
On completion of the Arrangement, former Genterra Shareholders,
other than the Litwin Group, are expected to hold
approximately 28% of the outstanding Genterra Energy Shares.
It is intended that an application be made for the listing of the
Genterra Energy Shares on the Canadian Securities Exchange.
Prior to completion of the Arrangement, Genterra Energy intends
to change its name to Gencan Inc., or such other name as its
directors deem appropriate, and it will also effect a split of its
100 issued and outstanding common shares into issued and
outstanding into 16,628,716 common shares.
Genterra's board of directors has unanimously approved the
transaction and recommends that Genterra shareholders vote in
favour of the Arrangement.
CVS has provided an opinion to a Special Committee of Genterra's
board of directors that the consideration is fair from a financial
point of view to Genterra Shareholders other than the Litwin
Group.
Benefits to Genterra Shareholders
- The total value of the consideration offered for each Genterra
Share, in the amount of Cdn$2.25,
represents a premium of 73% to the closing price of the Genterra
Shares on the TSX Venture Exchange (the "TSXV") on
July 2, 2015.
- The Arrangement allows investors to participate directly in
growth opportunities which may become available through Genterra
Energy's growth strategies.
- The spin-off of Genterra Energy as an independent company is
expected to provide management of Genterra Energy with a sharper
business focus for execution of short-term and long-term strategic
plans and to enhance Genterra Energy's ability to pursue its
independent corporate objectives.
- It is expected that the Arrangement will allow investors to
more accurately evaluate Genterra Energy on a stand-alone basis
against appropriate peers, benchmarks and performance criteria
specific to Genterra Energy.
In order to become effective, the Arrangement must be approved by a
resolution passed by at least 66⅔% of the votes cast by the
Genterra Shareholders present in person or by proxy at a meeting of
Genterra Shareholders and by a simple majority of the votes cast
excluding the votes of Genterra Shares held or controlled by the
Litwin Group. In addition to that approval, completion of the
Arrangement will be subject to certain customary conditions,
including the approval of the Ontario Superior Court of Justice.
Full details of the transaction will be set out in Genterra's
information circular that it will prepare in respect of the meeting
of shareholders to approve the transaction.
Copies of the Arrangement Agreement, management information
circular and certain related documents will be filed with
securities regulators and will be available on SEDAR at
www.sedar.com.
About Genterra Energy Inc.
Genterra Energy is currently a wholly-owned subsidiary of
Genterra and conducts Genterra's solar energy operations. Genterra
Energy's primary asset is its significant interest in a Renewable
Power Solar Rooftop Photovoltaic System. Since August 2014, Genterra Energy has engaged in the
business of solar energy generation and installation of solar
energy generation equipment under a Feed-In-Tariff Contract with
the Ontario Power Authority.
About Genterra Capital Inc.
Genterra Capital Inc. is a Canadian management holding company
operating in Canada with interests
in rental real estate properties and solar energy generation
equipment located in Ontario,
Canada. The Company also invests a portion of its surplus
cash on hand in marketable securities and notes receivable.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release. This News Release includes certain
"forward- looking statements" which are not comprised of historical
facts. Forward-looking statements include estimates and statements
that describe the Company's future plans, objectives or goals,
including words to the effect that the Company or management
expects a stated condition or result to occur. Forward-looking
statements may be identified by such terms as "believes",
"anticipates", "expects", "estimates", "may", "could", "would",
"will", or "plan". Since forward-looking statements are based on
assumptions and address future events and conditions, by their very
nature they involve inherent risks and uncertainties. Although
these statements are based on information currently available to
the Company, the Company provides no assurance that actual results
will meet management's expectations. Risks, uncertainties and other
factors involved with forward-looking information could cause
actual events, results, performance, prospects and opportunities to
differ materially from those expressed or implied by such
forward-looking information. Although the Company believes that the
assumptions and factors used in preparing the forward-looking
information in this news release are reasonable, undue reliance
should not be placed on such information, which only applies as of
the date of this news release, and no assurance can be given that
such events will occur in the disclosed time frames or at all. The
Company disclaims any intention or obligation to update or revise
any forward-looking information, whether as a result of new
information, future events or otherwise, other than as required by
law.
Cautionary Note Regarding Forward-Looking
Statements
Certain information in this press release may
constitute forward-looking information. This information is based
on current expectations that are subject to significant risks and
uncertainties that are difficult to predict. Actual results might
differ materially from results suggested in any forward-looking
statements. The Company assumes no obligation to update the
forward-looking statements, or update the reasons why actual
results could differ from those reflected in the forward
looking-statements unless and until required by securities laws
applicable to the Company. Additional information identifying risks
and uncertainties is contained in the Company's filings with the
Canadian Securities Regulators, which filings are available at
www.sedar.com.
SOURCE Genterra Capital Inc.