news news news CanAsia Announces Entering Into Letter of Intent to Acquire Techni Modul Engineering Inc. and Proposed Issuance of Debentures
Thursday, September 27, 2018, 11:53 AM ET
CanAsia Announces Entering Into Letter of Intent to Acquire Techni Modul Engineering Inc. and Proposed Issuance of Debentures
CALGARY, Alberta, Sept. 27, 2018 (GLOBE NEWSWIRE) -- CanAsia Financial Inc. ("CanAsia" or the "Company") (NEX: CNA.H) is pleased to announce that it has signed a non-binding letter of intent dated September 25, 2018 (the "LOI") with Techni Modul Engineering Ltd. ("TME"), a private company incorporated under the laws of France, whereby the Company will acquire all of the outstanding shares of TME by issuing to the shareholders of TME a total of 87,600,000 common shares of CanAsia (the "Common Shares") at a deemed value of $0.125 per Common Share for an aggregate consideration of CDN$10,950,000 and 19,200,000 non-voting series D preferred shares of CanAsia ("Preferred Shares") (the "Proposed Acquisition"). Except where noted, the Common Share numbers in this press release assumes that CanAsia has completed a five for one share consolidation. Subject to the conditions noted below, each Preferred Share may be converted by the holder thereof into one Common Share at no additional cost to the holder for a period of five (5) years from the date of issuance.
The Company currently has 113,168,052 Common Shares issued and outstanding (prior to consolidation). The Proposed Acquisition is a reverse takeover pursuant to the rules of the TSX Venture Exchange Inc. ("Exchange"). Sicheng Zhang is a director and significant shareholder of CanAsia and TME. Jim Hsieh is a director of CanAsia and a director and shareholder of TME. Therefore, the Proposed Acquisition is non-arm's length.
TME is in the business of providing its customers with quality composite forming and curing equipment and solutions primarily applied in aeronautics and automotive industries. TME's vision is to provide the critical composite solutions needed in aerospace, defense, automotive and sports sectors. TME specializes in an industrial approach to provide equipment and solutions for composites, which increases the efficiency of manufacturing products from composites and reduces the cost of production, investments and labour (manual versus robotized).
The Preferred Shares are to include the following conditions:
1. Each Preferred Share is convertible into one Common Share only if TME's
aggregate EBITDA (Earnings before Interest, Tax, Depreciation and
Amortization) on or before 36 months from the completion date of the
Proposed Acquisition has accumulated to at least EUREUR3.5 million (the
satisfaction shall be referred to as a "Success");
2. Mr. Serge Luquain will continue his employment by TME and/or CanAsia for
no less than 36 months from the completion date of the Proposed
Acquisition; and
3. CanAsia may, in its discretion, cancel all of the issued and outstanding
Preferred Shares if TME fails to reach Success after 36 months from the
completion date of the Proposed Acquisition.
The completion of the Proposed Acquisition is also subject to several other conditions set out in the LOI, including approval by the directors of the Company and TME, entering into a definitive agreement, satisfactory completion of due diligence, regulatory approval and shareholder approval.
The Company will issue a future press release or press releases setting out financial information on TME, information on the directors and officers of the Company after the completion of the Proposed Acquisition, and other information respecting the Proposed Acquisition.
The Company has requested a halt in trading of its Common Shares and, pursuant to the rules of the Exchange, the halt in trading is expected to continue until the completion of the Proposed Acquisition and the minimum listing requirements of the Exchange are met or such earlier time as may be allowed by the Exchange. Sponsorship pursuant to rules of the Exchange may be required and CanAsia plans to apply for a waiver. The Company has not yet engaged a sponsor. If the Proposed Acquisition is completed CanAsia expects to be listed on the Exchange as an industrial issuer.
Completion of the Proposed Acquisition is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. The Proposed Acquisition cannot close until the required approvals are obtained. There can be no assurance that the Proposed Acquisition will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Proposed Acquisition, any information released or received with respect to the Proposed Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the Proposed Acquisition and has neither approved nor disapproved the contents of this press release.
Proposed Issuance of Debentures
CanAsia announces that it plans to complete a non-brokered private placement of convertible unsecured debentures (the "Debentures") in the principal amount of $660,000 for gross proceeds of $500,000 and the conversion into the Debentures of $160,000 of previous advances (the "Offering"). The Debentures will accrue interest at 5% per year, mature two years from the date of issuance, will be payable at any time by the Corporation without penalty and will be convertible by the holder at any time into Common Shares at a conversion price of $0.125 per Common Share.
The proceeds of the Offering will be used to pay outstanding and ongoing expenses to maintain the Company's status as a reporting issuer listed on NEX, and to complete the Proposed Acquisition. Completion of the Offering is subject to regulatory approval, including the approval of the Exchange. The securities issued will be subject to a four month hold period from the date of the closing of the Offering. It is anticipated that the Offering will close on or before October 16, 2018, and the subscribers to the Offering will be directors and shareholders of CanAsia, Sicheng Zhang and Jim Hsieh, or entities controlled by them.
About CanAsia
CanAsia is an Alberta based company listed on the NEX board of the TSX Venture Exchange. It is engaged in the business of developing unique new business opportunities in the Pacific Rim countries and elsewhere. The Company is located in Calgary, Alberta of Canada.
For further information, please contact James G. Louie, Chief Executive Officer via email louiejd@shaw.ca.
Advisory
This news release may contain certain forward-looking information and statements, including without limitation, statements pertaining to the Proposed Acquisition including the Company's ability to obtain the necessary approvals, including regulatory approvals and the entering into of a definitive agreement. Statements containing the words: 'believes', 'intends', 'expects', 'plans', 'seeks' and 'anticipates' and any other words of similar meaning are forward-looking. All statements included herein involve various risks and uncertainties because they relate to future events and circumstances beyond the Company's control. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in CanAsia's disclosure documents on the SEDAR website at www.sedar.com. Any forward-looking statements are made as of the date of this press release and CanAsia does not undertake to update any forward-looking information except in accordance with applicable securities laws.
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.
(END) Dow Jones Newswires
September 27, 2018 11:53 ET (15:53 GMT)