Sunora signs LOI with Folspire, plans to delist 2021-01-21 11:15 MT - News Release
Mr. Steve Bank reports
SUNORA FOODS ANNOUNCES LETTER OF INTENT WITH FOLSPIRE INC.
Sunora Foods Inc. has signed a letter of intent with Folspire Inc., an arm's-length entity controlled by Charles Eghobamien. The transaction will involve the purchase of up to 100 per cent of the corporation's outstanding common shares for an aggregate purchase price of $6,893,131.44 or 17 cents per common share.
The net effect of the transaction will be that the corporation will not have any public shareholders. The corporation plans to delist from the TSX Venture Exchange on the effective closing date and will apply to the applicable securities commissions to cease being a reporting issuer. Each shareholder of the Corporation would receive $0.17 (the " Consideration ") in cash for each common share held immediately prior to the Transaction becoming effective, representing a 70% premium from the last closing price of $0.10. The Transaction is arm's length.
The Corporation wishes to complete the Transaction in order to provide its shareholders with the opportunity to realize some value for their common shares, having regard to COVID 19 related economic uncertainty, the significant cost of maintaining a public listing, and the common shares are thinly traded. Based on the significant premium to the last trading price and the value of the Consideration, the Board of Directors of the Corporation believe the Transaction is in the best interest of the company and all stakeholders. The Corporation will include an analysis and conclusions, from a financial point of view, of the Consideration to be paid to the shareholders, in the Corporation's management information circular for the Meeting, as defined below, a copy of which will be mailed to each of the Corporation's shareholder and will also be available under the company's profile at SEDAR.
The Transaction is also subject to shareholder approval by 2/3rds of the voting common shares voted at a special meeting (the " Meeting ") of the Corporation, which is expected to be held in April of 2021.
Pursuant to the LOI, the Buyer shall have a period of sixty (60) days to complete its due diligence. The Corporation and the Buyer will work to complete the transaction by April 1, 2021 or such later date as the parties may agree to in writing. The Corporation will give the Buyer exclusivity for a period not to exceed seventy-five (75) days from the date of the LOI. The Buyer has provided a refundable deposit of $100,000 in connection with the Transaction.
The Transaction is subject to the following conditions:
- completion of satisfactory due diligence by the Buyer;
- execution of a definitive purchase and sale agreement;
- negotiation of an agreement for key management and key employees' continuation of employment after the completion of the Transaction;
- shareholder approval;
- TSXV approval; and
- lease assignment.
The Transaction will also eliminate the burden of continuing as a reporting issuer. Under applicable securities laws a broad range of regulatory obligations are imposed on companies with public shareholders, including the provision of quarterly financial statements and information to shareholders, mandatory solicitation of proxies for annual meetings, increased insurance costs, transfer agent and stock exchange fees and compliance cost, and shareholder communication costs. These regulatory requirements necessitate the employment of independent accountants, financial consultants, printers, lawyers and other skilled personnel. Management of the Corporation believes that the present and anticipated time and costs entailed in meeting the additional disclosure and other regulatory obligations to which public companies are subject cannot be justified in view of the economic uncertainty and limited upside to shareholders in the future.
Additional information will be dissemination with the execution of the definitive agreement. The Transaction will result in the sale of 100% of the outstanding common shares of the Corporation and the Corporation's common shares are expected to be delisted shortly after closing the Transaction. The Transaction remains subject to all appliable regulatory and TSXV approvals.
About Sunora Foods
Sunora Foods is a Calgary, Alberta based food oil entity , trading and supplying canola oil, soybean oil, olive oil , and specialty oils in Canada and internationally under the "Sunora", "Sunera" and numerous private label brands.
We seek Safe Harbor.