Western Resources arranges $80M investment from Vantage Western Resources arranges $80M investment from Vantage
2022-02-16 15:02 ET - News Release
Mr. Bill Xue reports
WESTERN POTASH HOLDINGS CORP. AND VANTAGE CHANCE LIMITED ENTER INTO SUBSCRIPTION AGREEMENT
Western Resources Corp. has signed a subscription agreement with Vantage Chance Ltd., in which Vantage has committed to make a strategic equity investment of $80-million in Western Potash Holdings Corp. (WPHC), a newly formed company which, upon completion of a reorganization (described below), will own 100 per cent of Western Potash Corp. (WPC) and its Milestone potash project. Vantage is a private investment company registered in the British Virgin Islands.
WPHC was incorporated under British Columbia's Business Corporations Act on Jan. 13, 2022, by Western for the purpose of structuring the transaction. Upon approval by Western's shareholders, and prior to the completion of the transactions contemplated in the subscription agreement, Western will transfer its 100-per-cent equity interest in WPC (134,017,653 common shares) to WPHC in exchange for an equivalent number of WPHC common shares, which will represent 100 per cent of the issued and outstanding shares of WPHC.
Under the subscription agreement, Vantage will invest $80-million in WPHC and receive in exchange an aggregate of 157,325,071 WPHC common shares. As a result, Vantage will hold 54 per cent of the issued and outstanding common shares of WPHC. Western will hold the remaining 46 per cent of the issued and outstanding WPHC common shares.
Completion of the investment transactions is subject to customary closing conditions, including approval by Western's shareholders at Western's upcoming annual and special shareholders meeting scheduled for March 28, 2022, and obtaining certain regulatory approvals. Closing is expected to occur on or around May 31, 2022. The investment proceeds raised from the investment transaction will be used in the completion of the Milestone potash project construction. Full details of the investment transaction and the reorganization will be included in a management information circular of Western that is expected to be mailed to Western shareholders on or around Feb. 22, 2022. The subscription agreement and the circular will be made available on SEDAR under the issuer profile of Western.
Bill Xue, Western's president and chief executive officer, stated: "The last two years have been very challenging for Western, as we attempted to complete phase I of our Milestone potash project, with limited access to capital due to a variety of factors, including COVID-19. We expect that the investment by Vantage will allow us to complete the project and allow it to recognize its full potential, including use of the innovative technology we have developed alongside. When successfully completed, we expect the project will significantly change potash mining in Canada as the project is planned to be the first potash mine in the world to leave no salt tailings at surface level, reduce water consumption by up to 50 per cent and significantly improve energy efficiency. We look forward to working closely with our new partner as we continue to develop and expand Milestone."
We seek Safe Harbor.