BioExx signs binding agreements for Saskatoon assets
BioExx signs binding agreements for Saskatoon assets
2013-07-09 08:39 ET - News Release
Mr. Chris Schnarr reports
BIOEXX PROVIDES UPDATE ON SASKATOON ASSET SALES
BioExx Specialty Proteins Ltd. has signed binding purchase agreements with two purchasers for its Saskatoon land, building and equipment, for a combined total of approximately $11.0-million, subject to customary terms and approvals. As previously announced, the company is discontinuing operations at its Saskatoon facility.
Under the terms of the first purchase agreement, the purchaser will acquire certain protein processing equipment and ancillary assets for $3.5-million. This purchase is expected to close on or about July 31, 2013. The closing is subject to customary terms, including completion of definitive documentation and approval of secured creditors.
Under the terms of the second purchase agreement, the purchaser will acquire the land, building and certain canola-crushing assets for $7.5-million. This purchase is expected to close on or about Oct. 31, 2013. The closing is subject to customary terms, including environmental and structural inspections, completion of definitive documentation, delivery of vacant possession after removal of the assets to be sold to the first purchaser, and approval of secured creditors.
BioExx intends to use the proceeds of the asset sales to fully repay its first secured creditor in the amount of approximately $7.2-million plus any additionally accrued interest to the repayment date. The balance of the proceeds is intended to be allocated to service other debts as required and for general working capital.
Prior to the recent decommissioning, the plant continued to run efficiently and effectively, with both North American and European seed hitting record yields and protein purity levels of 97 per cent.
"We are committed to BioExx's proprietary protein technology and are actively working towards a successful conclusion to our strategic review process," said Chris Schnarr, chief executive officer of BioExx. "Once completed, the sales of the Saskatoon assets will allow us to address our debt payments and other financial obligations, while also providing us with additional working capital to better realize the potential of our technology."
The company also reports that its work toward a strategic relationship with the previously noted integrated and diversified global agribusiness company is progressing. Both companies are working actively together in product evaluation, application testing, economic modelling, strategic planning and other due diligence. While the global strategic relationship remains a core focus of the company, efforts continue to secure a financial partner for its previously announced proposed European joint venture with the specialty oil producer. The company will provide further progress updates as additional details become available.
In order to obtain the consent of its debenture holders to the asset sales outlined above, the company has offered debenture holders 10 share purchase warrants for every $1 of principal amount of debentures held by them (each such whole warrant entitling the holder to purchase one additional common share in the capital of the company at an exercise price of five cents for a period of 24 months from its date of issuance), as well as an increase in the redemption premium the company would pay should it opt to redeem any debentures in advance of their maturity in November, 2015.
It should be noted that there can be no assurances or guarantees that the current strategic review process will result in the company obtaining a strategic partner to facilitate its business plan objectives. If the company is unable to secure such a strategic partner or obtain additional financing, the board of directors of the company would consider additional alternatives to monetize assets for stakeholders, including, among other things, a sale of the company or its remaining assets.
We seek Safe Harbor.