Letter of Intent for Qualifying Transaction New York, New York--(Newsfile Corp. - September 2, 2021) - Navigator Acquisition Corp. (TSXV: NAQ.P) ("Navigator" or the "Company") is pleased to announce that it has entered into a binding letter of intent ("LOI") dated August 30, 2021, with PJSC "ORG" ("ORG"), a public joint-stock company duly incorporated under the laws of Russian Federation, which will result in the acquisition by Navigator of the wholly-owned subsidiary of ORG, MCC "Arifmetika" LLC ("Arifmetika"). The LOI states that ORG shall incorporate a holding company ("HoldCo") which shall hold 100% of the issued and outstanding shares of Arifmetika. The holders of the issued and outstanding shares of HoldCo, or the issued and outstanding shares of Arifmetika, as applicable, will exchange all of the issued and outstanding securities of Arifmetika in exchange for securities of the resulting issuer (the "Transaction").
The Transaction is intended to constitute Navigator's Qualifying Transaction pursuant to Policy 2.4 (Capital Pool Companies) of the TSX Venture Exchange ("TSX-V") Corporate Finance Manual. In connection with the Transaction, the Company intends to apply to list its common shares on the Toronto Stock Exchange. The Transaction is subject to the approval of the TSX-V and Toronto Stock Exchange, execution of a definitive agreement and other closing conditions customary for a transaction of this nature. Navigator, upon completion of the Transaction, is referred to in this news release as the "resulting issuer".
Arifmetika is a leading microlending company operating in Russia for more than 11 years. Further information about Arifmetika, including financial information, will be provided in a subsequent news release. Arifmetika's principal assets, equal to approximately C$44,311,087.47 based on its audited accounts for the year ended December 31, 2020. Arifmetika's current liabilities, equal to approximately C$2,478,084.38 based on the audited accounts, primarily comprise interest-bearing loans and borrowings. As of the date of the audited accounts, Arifmetika had revenues of C$46,795,923.16 and had net revenue equal to approximately C$10,953,527.33.
Transaction Structure
The LOI contemplates that the holders of the issued and outstanding shares of HoldCo or Arifmetica, as the case may be, will exchange such shares for common shares in the capital of the resulting issuer, resulting in the issuance by the resulting issuer of approximately 224,927,143 common shares.
Upon completion of the Transaction, the resulting issuer will hold 100% of the issued and outstanding securities of Arifmetika and it is anticipated that the resulting issuer will apply to list on the Toronto Stock Exchange, in addition to changing its name and trading symbol to a name and trading symbol acceptable to Arifmetika and the applicable regulatory authorities. The LOI was negotiated at arm's length and the parties are currently negotiating the terms of a definitive agreement.
Upon completion of the Transaction, the resulting issuer is expected to have 241,857,143 common shares outstanding (undiluted).
Certain of the resulting issuer shares issued to the principals of Arifmetika that will become management of the resulting issuer will be subject to escrow in accordance with Toronto Stock Exchange policies.
Management and Board of Directors
Upon completion of the Transaction, it is expected that certain current members of Navigator's board of directors and certain senior officers will resign, and the board of directors and management team and the resulting issuer will be reconstituted to comprise of five members to be nominated by ORG and two members to be nominated by Navigator. Navigator will provide further details regarding the proposed insiders of the resulting issuer in due course.
Conditions of Transaction
Upon completion of the Transaction, the parties anticipate that the resulting issuer will be listed on the Toronto Stock Exchange.
Completion of the Transaction will be subject to certain conditions, including, but not limited to, (a) receipt of all necessary approvals of the boards of directors of Navigator and Arifmetika; (b) approval of the Transaction by the TSX-V as Navigator's qualifying transaction; (c) Arifmetika satisfying the initial listing requirements set by the Toronto Stock Exchange; and (d) the parties' entry into a definitive agreement in furtherance to LOI.
Sponsorship
Sponsorship of a Qualifying Transaction is required by the TSX-V unless the transaction qualifies for an exemption from the sponsorship requirement. Navigator intends to apply from a waiver from the sponsorship requirements. However, there is no assurance that such waiver will be obtained.
Additional information
Additional information identifying risks and uncertainties is contained in filings by Navigator with the Canadian securities regulators, which filings are available on its SEDAR profile.
About MCC Arifmetika LLC
Arifmetika is a leading microlending company operating in Russia for more than 11 years.
It uses modern algorithms to manage risks for providing its clients with customized solutions to meet their needs. Its management team manages business processes and consists of 300 professionals, including key specialists who have many years of experience in the microfinance sector.
Arifmetika is currently developing a high-tech platform for disbursing online loans and is a leader in terms of the number of service points among federal companies in the microfinancing market. It manages more than 600 service points in 258 localities of Russia. Arifmetika has its own IT infrastructure, including three data centers in Moscow, Khabarovsk, and Novosibirsk. It uses artificial intelligence and big data solutions to analyze the customer base and develop new products and blockchain to protect personal data.