TORONTO,
Dec. 17, 2013 /CNW/ - McVicar
Industries Inc. ("McVicar" or the "Company") today announces that
its wholly-owned subsidiary McVicar (Hong
Kong) Advanced Material Co., Ltd. ("McVicar HK") has signed
a binding Letter of Intent ("LOI") to sell its wholly-owned
subsidiary Zhejiang Hongbo Chemical Co., Ltd. ("Hongbo") to a
private, Hong Kong company to be
formed by a group of investors (the "Buyer"), who are also the
former shareholders of Hongbo.
The LOI stipulates that the Buyer will purchase
McVicar HK's 100% interest in Hongbo with the exception of Hongbo's
interests in Luyuan Chemical Co., Ltd. and Anhui Linghua Co., Ltd.,
two indirectly-owned subsidiaries, which will be transferred to
McVicar HK. In consideration for the purchase, the Buyer will
surrender to the Company the approximately 6.8 million common
shares of McVicar received by the Buyer on the Company's original
acquisition of Hongbo in 2007. Upon receipt these shares of McVicar
will be cancelled. In addition, a further RMB 2 million cash (~CDN $340,000) consideration will be paid to the
Company by the Buyer, upon and subject to (i) the completion of the
proposed transaction, (ii) resumption of Hongbo's operation
and (iii) receipt of 80% outstanding of Hongbo's accounts
receivable. Further, upon completion of the proposed transaction,
the outstanding inter-company balances among the Company, Hongbo,
Luyuan and Anhui will be waived by
each other.
The proposed transaction is subject to customary
closing conditions, including execution and delivery of all
necessary agreements, releases and receipt of all required
regulatory approvals.
The Company entered into the LOI after an
extensive negotiation process that included in-depth discussions
with the Buyer and an evaluation of the other alternatives relative
to the Hongbo's current situation following the recent factory
occupation.
About McVicar
McVicar Industries Inc., headquartered in
Toronto, Canada, is focused on
investments and acquisitions of businesses in China. At present, McVicar has operations in
both electronic components and specialty chemicals in four
operations in China.
Forward-Looking Statements
Information set forth in this news release may
involve forward-looking statements under applicable securities
laws. The forward-looking statements contained herein are expressly
qualified in their entirety by this cautionary statement. The
forward-looking statements included in this document are made as of
the date of this document and the Company disclaims any intention
or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as expressly required by applicable securities legislation.
Although Management believes that the expectations represented in
such forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct. This
news release does not constitute an offer to sell or solicitation
of an offer to buy any of the securities described herein and
accordingly undue reliance should not be put on such.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSXV) accepts responsibility for the adequacy or accuracy of this
release.
SOURCE McVicar Industries Inc.