Western Potash Corp. Receives Strategic Investment
Western Potash Corp. Receives Strategic Investment from China BlueChemical Ltd. and GUOXIN International Investment Corporation Limited.
VANCOUVER, British Columbia (Business Wire) -- Western Potash Corp ("Western" or the "Company") (TSX: WPX) today
announced that China BlueChemical Ltd. ("China Blue") (3983: HK) and
Benewood Holdings Corporation Limited ("Benewood"), through a joint
venture company, CBC (Canada) Holding Corp. ("CBCHC"), have agreed to
make a strategic equity investment of C$ 31,979,022 in Western at a
price of $0.71 per common share for a total of 45,040,876 newly issued
common shares, which will result in CBCHC holding a 19.9% ownership
stake in the Company on a non-diluted basis. The issue price represents
a 15% premium over the 20 day volume weighted moving average. China Blue
is a majority owned subsidiary of China National Offshore Oil
Corporation ("CNOOC"), the largest offshore oil and gas producer in
China. Benewood is a wholly owned subsidiary of GUOXIN International
Investment Corporation Limited, a financial investment company
registered in Hong Kong ("Guoxin").
Mr. Patricio Varas, CEO of Western commented, "This investment is a
testament to CBCHC's confidence in the positive business climate in
Saskatchewan, the exceptional nature of the Milestone deposit and
Western's team. Our strategic alliance with China Blue and Guoxin will
provide Western with access to project financing, technical expertise in
large-scale project construction and marketing channels for future
potash sales. "
In addition, Western and CBCHC have agreed to an off-take term sheet
under which CBCHC or a purchaser designated by it will enter into an
off-take agreement for the purchase of the lesser of 30% or 1 million
tonnes of potash annually from Western's Milestone project for a 20 year
term. The off-take agreement will automatically extend for five-year
periods unless either party elects not to extend.
CBCHC has a right to appoint one nominee to the board of directors of
Western pursuant to the investment agreement.
Closing of the private placement is subject to customary closing
conditions including the approval of the Toronto Stock Exchange. It is
anticipated that the closing will take place on or about June 14, 2013.