THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED
BY SDX TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE
MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR"). ON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION
SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN
THE PUBLIC DOMAIN.
LONDON, April 8, 2019 /CNW/ - Arrangement
Agreement for Proposed Re-Domicile to the UK
Further to the announcement of the Company's plans to relocate
its corporate residence from Canada to the UK, with a group reorganisation,
and to delist from the TSX-V, SDX Energy Inc. (TSXV, AIM: SDX),
announces that it entered into an arrangement agreement on
5 April 2019 (the "Arrangement
Agreement") between the Company and SDX Energy plc ("SDX
UK") (a newly incorporated wholly-owned subsidiary of the
Company).
Pursuant to the Arrangement Agreement, SDX UK will acquire all
of the issued and outstanding common shares in the capital of the
Company (the "SDX Canada Shares") in exchange for new
ordinary shares in SDX UK ("SDX UK Shares") on a one-for-one
basis to facilitate the Company's proposed reorganisation to effect
a re-domicile to the United
Kingdom (the "Re-Domicile"). In connection with the
Re-Domicile, SDX UK will apply for admission to trading of the SDX
UK Shares on the AIM market of the London Stock Exchange plc
("AIM"). Upon the admission of the SDX UK Shares to trading
on AIM, SDX Canada intends to delist the SDX Canada Shares from the
TSX Venture Exchange (the "TSXV") and cancel the admission
to trading of the SDX Canada Shares (including depositary interests
representing such shares ("Depositary Interests")) on
AIM.
In connection with the Re-Domicile, the Company has obtained an
interim order from the Court of Queen's Bench of Alberta (the "Court") pursuant to which
the Company will send to shareholders of SDX Canada ("SDX Canada
Shareholders") a management information circular (the
"Circular") setting out the details of the Arrangement and
containing a notice of annual and special meeting of SDX Canada to
be held at the Holiday Inn London Oxford Circus, Meeting Room 3,
57-59 Welbeck Street, London, W1G
9BL, United Kingdom on
May 17, 2019 at 9.00 a.m. (UK time) (the
"Meeting").
At the Meeting, among other things, the SDX Canada Shareholders
will be asked to approve the Re-Domicile and its implementation by
way of an Alberta, Canada,
court-approved plan of arrangement (the "Arrangement"),
pursuant to the Arrangement Agreement. The Arrangement will result
in SDX UK becoming the ultimate parent company of SDX Canada and
its subsidiaries (collectively, the "SDX Canada Group" and
together with SDX UK and its subsidiaries, the "SDX Group").
SDX UK will have its head office and registered office located in
London and SDX UK will be subject
to the Companies Act 2006 (as amended).
The Arrangement must be approved by not less than 66⅔ per cent
of the votes cast by SDX Canada Shareholders present in person or
represented by proxy and entitled to vote at the Meeting. Each SDX
Canada Shareholder will be entitled to one vote for each SDX Canada
Share held. The Arrangement also requires, among other things,
final approval of the Court of Queen's Bench of Alberta (the "Court"). The Court is
scheduled to hear the application with respect to final approval of
the Arrangement on 21 May 2019,
following the Meeting. If the Arrangement is approved by the SDX
Canada Shareholders at the Meeting and final approval is granted by
the Court, it is intended that the Arrangement will be completed on
May 27, 2019 (the "Effective
Date") and that the SDX UK Shares will be admitted to trading
on AIM on May 28, 2019.
Reasons for the Arrangement
The board of directors of SDX Canada (the "Board") has
concluded that the Re-Domicile of SDX Canada is in the best
interests of SDX Canada. The decision of the Board to approve the
Arrangement for submission to SDX Canada Shareholders was reached
after consideration of numerous factors, including among others,
the following:
- The determination to proceed with the Re-Domicile was reached
as part of a corporate review that included identifying the most
efficient and cost effective procedures for managing the business,
given the location of SDX Canada's operations in Egypt and Morocco and the location of its management and
majority of its directors in London,
UK.
- The Board does not believe that the costs associated with
maintaining a dual listing on AIM and the TSXV and retaining a
corporate domicile under the Canada Business Corporations
Act ("CBCA") justifies the benefits. This is especially
the case given that approximately 80.02 per cent of the SDX Canada
Shares are not held by Canadians and approximately 77 per cent of
SDX Canada's average daily trading volumes in 2018 took place on
AIM. SDX Canada currently incurs high costs associated with having
a dual listing on AIM and on the TSXV and retaining a corporate
domicile under the CBCA and on completion of the Re-Domicile and
delisting from the TSXV, annual cost savings of between
US$0.5 million and US$1.0 million are expected to be realized.
- The Board determined that the possibilities for optimizing SDX
Canada's tax structure and reducing its regulatory compliance
burden would be greater following the Re-Domicile.
- Given the current market appetite in Canada for SDX Canada's business and
operations, the Board is of the opinion that there would continue
to be a lack of interest from Canadian institutions and, therefore,
it does not see any benefit in maintaining a listing on the
TSXV.
- The Re-Domicile of SDX Canada to the UK will further raise SDX
UK's profile and status amongst (i) UK and European investors who
are unable to invest in non-UK domiciled public companies; and (ii)
the international oil and gas sector generally. Both of these
benefits are expected to provide SDX UK with incremental access to
equity capital from an international market with considerable
equity research expertise and coverage and a broader, more relevant
peer group.
- For the Arrangement to proceed, the Arrangement Resolution must
be approved by 66⅔ per cent of the SDX Canada Shareholders, present
in person or by proxy at the Meeting.
- SDX Canada's largest shareholder, SDX SPV Limited, which holds
19.48 per cent of the outstanding SDX Canada Shares, as well as
other significant shareholders and Board members holding a further
15.64 per cent of the outstanding SDX Canada Shares, have agreed to
support the Arrangement pursuant to a voting support
agreement.
Terms of the Arrangement
Under the terms of the Arrangement Agreement, if the requisite
approval of the Arrangement is obtained from the SDX Canada
Shareholders and the Court and the Arrangement is affected, SDX
Canada's Shareholders will receive one SDX UK Share for each SDX
Canada Share held.
Immediately upon the Arrangement becoming effective, a SDX
Canada Shareholder will have the same proportionate interest in the
profits, net assets and dividends of SDX UK as they have in SDX
Canada immediately prior to the Effective Date. The SDX Group will
have the same business and operations immediately after the
Effective Date as the SDX Canada Group had immediately before the
Effective Date. The assets and liabilities of the SDX Group
immediately after the Effective Date will not differ materially
from the assets and liabilities the SDX Canada Group had before the
Effective Date, save that SDX UK will hold all of the common shares
then in issue in SDX Canada.
Deposit and Exchange Procedures
Assuming the Arrangement becomes effective, registered holders
of SDX Canada Shares wishing to receive a certificate representing
the SDX UK Shares received in exchange for their SDX Canada Shares
under the Arrangement, or wishing to have such SDX UK Shares
deposited in CREST, will be required to deposit the certificate(s)
representing the SDX Canada Shares held by them, along with a duly
completed letter of transmittal ("Letter of Transmittal")
delivered to such registered holder along with the Circular, to the
TSX Trust Company on the address specified on the last page of the
Letter of Transmittal.
If you are a registered holder of Depositary Interests held
through CREST, you do not have to complete a Letter of Transmittal.
The SDX UK Shares will be credited to the CREST accounts of such
holders of Depositary Interests in advance of the SDX UK Shares
being admitted to trading on AIM.
Beneficial holders or non-registered holders of SDX Canada
Shares or Depositary Interests in SDX Canada Shares should contact
the intermediary (e.g. bank, trust company, securities dealer or
broker and a trustee or administrator of a self-administered
registered savings plan, registered retirement income fund,
registered education savings plan or similar plans or other
registered holder) who holds their SDX Canada Shares or Depositary
Interests on their behalf to arrange for the exchange of their SDX
Canada Shares or Depositary Interests.
Where SDX Canada Shares are currently registered in the name of
a nominee (e.g. CDS or CEDE & Co.), brokers,
financial institutions, trust companies and other Intermediaries
are advised that for SDX Canada Shareholders that receive
SDX UK Shares under the Arrangement, CREST details must be
provided to the nominee (to be forwarded to the Depositary) within
60 days following the Effective Date. The CREST details that
are required are outlined on the Letter of Transmittal. If CREST
details are not provided to the nominee within 60 days following
the Effective Date, a share certificate representing
the SDX UK Shares will automatically be issued according to
registration instructions provided by the nominee for the SDX
Canada Shareholder.
For further information, if you are (i) a registered holder of
SDX Canada Shares, please contact the TSX Trust Company, (ii) a
beneficial holder of SDX Canada Shares, please contact your dealer
or broker, or (iii) if you are a registered or beneficial holder of
Depositary Interests, please contact Link Market Services Trustees
(Nominees) Limited.
TSX Trust
Company
|
|
Link Market
Services Trustees (Nominees) Limited
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North American Toll
Free: 1-866-600-5869 Telephone:
416-342-1091
Facsimile: 416-361-0470
Email:TMXEInvestorServices@tmx.com
|
|
Telephone (Inside the
UK): 0371 664 0330
Telephone (Outside
the UK): +44 (0) 371 664 0330
E-Mail:
custodymgt@linkgroup.co.uk
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Paul Welch, President &
CEO of SDX Canada, commented: "The significant cost savings of
this change, combined with the improved liquidity provided by
trading on a single exchange, will benefit all shareholders. I
appreciate the support of our Canadian shareholders and look
forward to working with them as they transition to AIM."
South Disouq Development Project
The current targeted
start-up date for gas production at South Disouq of mid-year 2019
is based on an overall development concept, whereby an Early
Production Facility ("EPF") will be leased to process the produced
gas, prior to completion of the main Central Gas Processing
Facility. At present, the final commercial terms of the EPF
have yet to be agreed. If ultimately an EPF is not secured,
the start-up date for gas production will be delayed until the
completion of the main Central Gas Processing Facility, currently
expected in Q4 2019.
Paul Welch, President &
CEO of SDX Canada, commented: "The potential delay to Q4
2019 for first gas in South Disouq is disappointing.
Discussions on the merits of the EPF are ongoing, and we will
advise the market when a final decision has been
reached."
About SDX Canada
SDX Canada is an international oil and gas exploration,
production and development company, headquartered in London, England, UK, with a principal focus on
North Africa. In Egypt, SDX Canada has a working interest in
two producing assets (50% North West Gemsa & 50% Meseda)
located onshore in the Eastern Desert, adjacent to the Gulf of
Suez. In Morocco, SDX Canada has a
75% working interest in the Sebou concession situated in the Rharb
Basin. These producing assets are characterised by exceptionally
low operating costs making them particularly resilient in a low oil
price environment. SDX's portfolio also includes high impact
exploration opportunities in both Egypt and Morocco.
For further information, please see the website of the Company
at www.sdxenergy.com or the Company's filed documents at
www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as such term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward‐Looking Information
Certain statements contained in this press release may
constitute "forward‐looking information" as such term is used in
applicable Canadian securities laws. Any statements that express or
involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions or future
events or are not statements of historical fact should be viewed as
forward-looking information. In particular, statements regarding
holding of the Meeting, benefits of the Re-Domicile, obtaining SDX
Canada Shareholder approval for the Arrangement, receipt of the
final court order and any other regulatory approvals for the
Arrangement, the closing of the Arrangement, the proposed delisting
of SDX Canada Shares on the TSXV and cancellation of the SDX Canada
Shares (and Depositary Interests) on AIM, the approval of the
admission of the SDX UK Shares and the currently targeted and
potentially delayed targeted start-up date for gas production at
South Disouq should be regarded as forward-looking information.
The forward-looking information contained in this document is
based on certain assumptions and although management considers
these assumptions to be reasonable based on information currently
available to them, undue reliance should not be placed on the
forward-looking information because SDX can give no assurances that
they may prove to be correct. This includes, but is not limited to,
assumptions related to, among other things, commodity prices and
interest and foreign exchange rates; general economic conditions in
Canada, the U.K. and globally;
industry conditions; applicable tax laws; governmental regulation;
unanticipated operating events or performance including leasing of
the EPF; ability to obtain regulatory and third party consents and
approvals; stock market volatility; future production rates; the
sufficiency of budgeted capital expenditures in carrying out
planned activities; and the availability and cost of labor and
services.
All timing given in this announcement, unless stated otherwise
is indicative and while the Company endeavors to provide accurate
timing to the market, it cautions that due to the nature of its
operations and reliance on third parties this is subject to change
often at little or no notice. If there is a delay or change to any
of the timings indicated in this announcement, the Company shall
update the market without delay.
Forward-looking information is subject to certain risks and
uncertainties (both general and specific) that could cause actual
events or outcomes to differ materially from those anticipated or
implied by such forward‐looking statements. Such risks and other
factors include, but are not limited to political, social and other
risks inherent in daily operations for the Company, risks
associated with the industries in which the Company operates, such
as: operational risks; delays or changes in plans with respect to
growth projects or capital expenditures; costs and expenses;
health, safety and environmental risks; commodity price, interest
rate and exchange rate fluctuations; environmental risks;
competition; ability to access sufficient capital from internal and
external sources; and changes in legislation, including but not
limited to tax laws and environmental regulations. Readers are
cautioned that the foregoing list of risk factors is not exhaustive
and are advised to reference the Circular for a description of
additional risks and uncertainties associated with the Arrangement
and with the Company's business, including its exploration
activities, which will be available on the Company's SEDAR profile
at www.sedar.com later today.
The forward‐looking information contained in this press release
is as of the date hereof and SDX Canada does not undertake any
obligation to update publicly or to revise any of the included
forward‐looking information, except as required by applicable law.
The forward‐looking information contained herein is expressly
qualified by this cautionary statement.
SOURCE SDX Energy Inc.