/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR
DISSEMINATION IN THE U.S./
CALGARY,
Sept. 3, 2013 /CNW/ - Novus Energy
Inc. ("Novus" or the "Company") (TSXV: NVS) is
pleased to announce that it has entered into a definitive agreement
(the "Arrangement Agreement") with Yanchang Petroleum
International Limited ("Yanchang Petroleum International")
and Yanchang International (Canada) Limited ("Yanchang Canada", and, together with
Yanchang Petroleum International, the "Purchaser Parties")
for the purchase of all of the issued and outstanding common shares
of the Company (the "Common Shares") at a cash price of
C$1.18 per Common Share. The total
transaction value, including net debt and transaction costs, is
approximately C$320 million. The
transaction is to be completed by way of a plan of arrangement
under the Business Corporations Act (Alberta) (the "Arrangement"). The
consideration offered for the Common Shares pursuant to the
Arrangement represents a 40% premium over the closing price of the
Common Shares on the TSX Venture Exchange on August 27, 2013, the last trading day of the
Common Shares prior to the subsequent halt thereof, and a 44%
premium over the 1-month volume weighted average trading price of
the Common Shares on the TSX Venture Exchange.
Yanchang Canada,
formed for the purpose of completing the Arrangement, is wholly
owned by Yanchang Petroleum International (Hong Kong Stock Code:
00346). Yanchang Petroleum International is a Hong Kong listed public company and is
principally engaged in the exploration, exploitation and operation
of oil and gas fields and refined oil wholesale and retail
businesses. Shaanxi Yanchang Petroleum (Group) Co., Limited
("Yanchang Petroleum Group"), the fourth largest oil
producer in China with more than
100 years of history, is the largest shareholder of Yanchang
Petroleum International and has majority representation on the
Board of Directors of Yanchang Petroleum International. In 2012,
Yanchang Petroleum Group achieved annual revenue of RMB 162 billion (approximately US$25 billion) and is the largest enterprise in
Shaanxi province in terms of
annual revenue.
The Arrangement
The Arrangement is subject to customary
conditions for a transaction of this nature, which include court
and regulatory approvals, the approval of 66 2/3% of the votes cast
by Novus shareholders represented in person or by proxy at a
meeting of Novus shareholders to be called to consider the
Arrangement and a simple majority of votes cast by Novus
shareholders represented in person or by proxy and entitled to vote
after excluding the votes required by Multilateral Instrument
61-101 and approval of the TSX Venture Exchange. The Arrangement
also requires a simple majority of votes cast by Yanchang Petroleum
International's shareholders, in person or by proxy, at a meeting
to be called to consider the Arrangement.
The Arrangement is subject to approval by the
State-owned Assets Supervision and Administration Commission of the
State Council ("SASAC") of the
People's Republic of China, and other customary approvals
from governmental entities in the
People's Republic of China. The Arrangement is conditional
upon Yanchang Petroleum International finalizing financing
arrangements.
On August 28,
2013, Yanchang Petroleum International entered into a
subscription agreement with Yanchang Petroleum Group (Hong Kong) Co., Limited ("Yanchang
Petroleum HK") (a wholly-owned subsidiary of Yanchang Petroleum
Group), pursuant to which Yanchang Petroleum HK has conditionally
agreed to subscribe for and Yanchang Petroleum International has
conditionally agreed to issue a convertible bond in the aggregate
principal amount of HK$1,600,000,000
(approximately C$217 million). The
proceeds from the issuance of the convertible bond will provide
additional financing for the Arrangement. In addition, Yanchang
Petroleum Group has indicated its willingness to provide additional
financial support to complete the financing in the event it is
required by Yanchang Petroleum International.
An information circular regarding the
Arrangement is expected to be mailed to shareholders of Novus in
October 2013 for an annual and
special meeting of the holders of Common Shares scheduled to take
place in November 2013. Closing of
the Arrangement is expected to occur prior to the end of
December 2013, subject to extension
in certain circumstances.
The Company has agreed in the Arrangement
Agreement that it will not solicit or initiate discussions
regarding any other business combination or sale of material
assets. The Company has also granted the Purchaser Parties a right
to match competing unsolicited proposals. Pursuant to the
Arrangement Agreement, a termination fee of C$10 million will be payable by the Company in
certain circumstances, including if the Company enters into an
agreement with respect to a superior proposal or if the Board of
Directors of the Company withdraws or modifies its recommendation
with respect to the proposed transaction. In addition, a
termination fee of C$5 million will
be payable to the Company if the Arrangement is not completed due
to failure to obtain required approvals of governmental bodies in
the People's Republic of China or
if Yanchang Petroleum Group, as the major shareholder of Yanchang
Petroleum International, fails to vote in favour of the Arrangement
at the meeting of Yanchang Petroleum International's
shareholders. Furthermore, a termination fee of C$7.5 million will be payable to the Company if
the Arrangement is not completed due to the failure by the
Purchaser Parties to obtain required financing for the
Arrangement.
A copy of the Arrangement Agreement will be
filed on Novus' SEDAR profile and will be available for viewing at
www.sedar.com.
Recommendation of the Board of
Directors
On December 4,
2012, Novus announced it had retained financial advisors to
assist the Special Committee of the Board of Directors in exploring
and evaluating a broad range of options to optimize shareholder
value. Technical presentations commenced during the third week of
January 2013 for interested and
qualified parties who had entered into a confidentiality agreement
with Novus. Following an extensive review and analysis of the
proposed transaction and consideration of other available
alternatives, the Board of Directors of Novus, after consulting
with its financial and legal advisors, has unanimously approved the
Arrangement and unanimously determined that the transaction is in
the best interests of Novus. The Board of Directors of Novus
unanimously recommends that all Novus shareholders vote in favour
of the Arrangement at the shareholder meeting to be called to
consider the Arrangement.
The Board of Directors and officers of Novus
intend to vote their respective Common Shares in favour of the
Arrangement, and have entered into support agreements with
Yanchang Canada pursuant to which
they have agreed to, among other things, vote their Common Shares
in favour of the Arrangement.
Yanchang Petroleum Group, the largest
shareholder of Yanchang Petroleum International, has conveyed its
intention to vote its shares in favour of the Arrangement at the
meeting of Yanchang Petroleum International's shareholders.
Advisors
Cormark Securities Inc. ("Cormark"), as
lead, and FirstEnergy Capital Corp. ("FirstEnergy") are
acting as financial advisors to Novus in the transaction. GMP
Securities L.P. is acting as special advisor to the Special
Committee of the Novus Board of Directors. Canaccord Genuity Corp.
and Haywood Securities Inc. are acting as strategic advisors to
Novus. Blake, Cassels & Graydon LLP is acting as legal counsel
to Novus.
Cormark and FirstEnergy have each provided the
Board of Directors of Novus with their verbal opinions that, as of
the date of the Arrangement Agreement and subject to review of
final documentation, the consideration to be received by the
holders of Common Shares under the written Arrangement is fair,
from a financial point of view, to such holders. A copy of each
financial advisor's opinion will be included in the information
circular to be sent to Novus shareholders for the special meeting
to be called to consider the Arrangement.
About Yanchang Petroleum International
Limited
Yanchang Petroleum International is principally
engaged in the following operations (i) investment in oil, natural
gas and energy related businesses; (ii) exploration, exploitation
and operation of oil and gas; and (iii) fuel oil trading and
distribution. In its upstream operations, Yanchang Petroleum
International holds a 100% stake in Block 3113 and Block 2104 in
the Republic of Madagascar. In its
downstream operations, Yanchang Petroleum International is
principally engaged in wholesale, retail, storage and
transportation of oil products and has been granted valid licenses
for distribution and sales of oil products in China. Yanchang Petroleum International
currently owns storage facilities with a total area of 209 mu
(approximately 14 hectares) and capacity of 120,000 cubic meters, a
2,500-meter private railway, a retail network of 10 refueling
stations, and has distribution and sales capability for processing
up to 2,000,000 tons of oil products per year. In the first half of
2013, Yanchang Petroleum International achieved its operating
target of sales volumes of over 900,000 tons of oil products and
sales revenue of over HK$8 billion
(approximately US$1 billion) for its
oil product operation in China.
For details, please refer to www.yanchangpetroleum.com.
About Shaanxi Yanchang Petroleum (Group) Co.,
Limited
Yanchang Petroleum Group is principally engaged
in oil and gas exploration, exploitation, processing, pipeline
transportation and sales of oil and gas; chemical engineering of
oil, gas and coal, machinery manufacturing, project construction
and oil and gas research and development. Yanchang Petroleum Group
owns the right for exploration, exploitation and operation of oil
and natural gas resources and has refining facilities in
China, and owns oil and natural
gas resource assets in China and
abroad. In 2012, Yanchang Petroleum Group produced 12.54 million
tons of crude oil, processed 14 million tons of crude oil and
produced 256 million cubic meters of natural gas, and achieved
annual revenue of RMB162 billion
(approximately US$25 billion).
Yanchang Petroleum Group, CNPC, Sinopec and CNOOC are the largest
four enterprises in China which
own and have the right to explore oil and gas resources in
China, and Yanchang Petroleum
Group is the sole petroleum enterprise with more than 100 years of
history. Based on Fortune 500 listing issued in 2013,
Yanchang Petroleum Group ranks No. 464 amongst the top 500
companies in the world and No. 183 in terms of earnings. For
details, please refer to www.sxycpc.com.
Neither the 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 will not constitute an
offer to sell or the solicitation of an offer to buy the securities
in any jurisdiction. Such securities have not been registered under
the United States Securities Act
of 1933 and may not be offered or sold in the United States, or to a U.S. person, absent
registration, or an applicable exemption therefrom.
Advisory Regarding Forward Looking
Statements
Certain disclosures set forth in this press
release constitute forward-looking statements. Any statements
contained herein that are not statements of historical facts may be
deemed to be forward-looking statements. Forward-looking statements
are often, but not always, identified by the use of words such as
"anticipate", "believes", "budget", "continue", "could",
"estimate", "forecast", "intends", "may", "plan", "predicts",
"projects", "should", "will" and other similar expressions. More
particularly and without limitation, this press release contains
forward-looking statements concerning: the anticipated benefits of
the Arrangement to Novus and its shareholders; the timing and
anticipated receipt of regulatory, court, shareholder and other
approvals for the Arrangement; the ability of Novus and Yanchang
Petroleum International to satisfy the other conditions to, and to
complete, the Arrangement; and the anticipated timing of mailing of
the information circular regarding the Arrangement, the Novus
shareholder meeting and the closing of the Arrangement.
In respect of the forward-looking statements and
information concerning the anticipated completion of the proposed
Arrangement and the anticipated timing for completion of the
Arrangement, Novus has provided such in reliance on certain
assumptions that it believes are reasonable at this time, including
assumptions as to the time required to prepare and mail Novus
shareholder meeting materials, including the required information
circular; the ability of the parties to receive, in a timely
manner, the necessary regulatory, court, shareholder and other
third party approvals; and the ability of the parties to satisfy,
in a timely manner, the other conditions to the closing of the
Arrangement. These dates may change for a number of reasons,
including unforeseen delays in preparing meeting materials,
inability to secure necessary shareholder, regulatory, court or
other third party approvals in the time assumed or the need for
additional time to satisfy the other conditions to the completion
of the Arrangement. Accordingly, readers should not place undue
reliance on the forward-looking statements and information
contained in this press release concerning these times.
Risks and uncertainties inherent in the nature
of the Arrangement include the failure of Novus or Yanchang
Petroleum International to obtain necessary shareholder,
regulatory, court and other third party approvals, or to otherwise
satisfy the conditions to the Arrangement, in a timely manner, or
at all. Failure to so obtain such approvals, or the failure of
Novus or Yanchang Petroleum International to otherwise satisfy the
conditions to the Arrangement, may result in the Arrangement not
being completed on the proposed terms, or at all. In addition, the
failure of Novus to comply with the terms of the Arrangement
Agreement may result in Novus being required to pay a
non-completion or other fee to Yanchang Petroleum International,
the result of which could have a material adverse effect on Novus'
financial position and results of operations and its ability to
fund growth prospects and current operations.
Forward-looking statements relate to future
events and/or performance and although considered reasonable by
Novus at the time of preparation, may prove to be incorrect and
actual results may differ materially from those anticipated in the
statements made. Novus does not undertake any obligation to
publicly update forward-looking information except as required by
applicable securities law.
Readers are cautioned that the foregoing list of
factors is not exhaustive. Additional information on these and
other factors that could affect Novus' operations or financial
results are included in reports on file with applicable securities
regulatory authorities and may be accessed through the SEDAR
website (www.sedar.com), and at Novus' website
(www.novusenergy.ca). The forward-looking statements and
information contained in this press release are made as of the date
hereof and Novus undertakes no obligation to update publicly or
revise any forward-looking statements or information, whether as a
result of new information, future events or otherwise, unless so
required by applicable securities laws.
SOURCE Novus Energy Inc.