Western Potash Corp. Announces Closing of Strategic Investment
bwire
VANCOUVER, British Columbia (Business Wire) -- Western Potash Corp. ("Western" or the "Company") is pleased to confirm
that the previously announced strategic investment by China BlueChemical
Ltd., ("China Blue") and Benewood Holdings Corporation ("Benewood"),
through a joint venture company, CBC (Canada) Holding Corp. ("CBCHC"),
has been completed (the "Transaction"). Western has issued to CBCHC
approximately 45 million common shares at a price of $0.71 for proceeds
of C$ 31,979,022, which represents a 19.9% ownership stake in the
Company on a non-diluted basis. China Blue is a majority owned
subsidiary of China National Offshore Oil Corporation ("CNOOC") and
Benewood is a wholly owned subsidiary of GUOXIN International Investment
Corporation Limited ("GUOXIN"), a financial investment company
registered in Hong Kong.
Pursuant to the subscription agreement for the Transaction dated June 1,
2013, as amended June 20, 2013 (together, the "Subscription Agreement"),
CBCHC received a right to appoint one Board of Directors nominee and
consequently, Mr. Yang Yexin is welcomed to Western's Board of Directors
(the "Board"). Mr. Yang has been an Executive Director & Chief Executive
Officer & President of China Blue since 2006. He joined the CNOOC group
in 1978 and served as a mechanical engineer and as the deputy head of
the mechanics division of China Offshore Oil Southern Drilling Company,
the deputy general manager of CNOOC Nanhai West CPEC (Shekou) Company;
the general manager of CNOOC Shipping Company and other various
positions in the CNOOC Group. Mr. Yang graduated from Wuhan
Communication Technology University in 1978 with a major in Vessel
Engineering and obtained a Master's degree in Business Management from
China University of Petroleum (Beijing) in 2004.
As previously announced, Western and CBCHC have signed an off-take term
sheet whereby 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 potash project for a
term of 20 years. Pricing of product sold under the agreement will be
based on market terms.
Upon completion today of CBCHC's strategic investment and pursuant to
the Subscription Agreement, the parties will form and jointly staff
three working committees within 30 days. A Technical Committee and a
Finance Committee will be formed, both of which will be made up of three
members from Western and three members from CBCHC. In addition, the
Chief Executive Officer and an individual holding a senior management
position in each of the Parties will form a Supervisory Committee.
The mandate of the Technical Committee will involve providing
recommendations for technical, construction and procurement inputs for
the Milestone potash project. The Finance Committee is to be responsible
for developing, evaluating and recommending potential project financing
strategies, communicating with potential project finance providers and
evaluating the terms of proposals received from such providers. The
Supervisory Committee will oversee both of these committees.
In addition, Mr. Zhimao Ma, Senior Engineer and General Manager of Legal
and Assets Management Department of China Blue has been appointed a
non-voting observer status to the Board. Mr. Ma brings deep potash and
fertilizer commercial experience from the sector as well as a sound M&A
and analytical background in the potash space.
Pursuant to the Subscription Agreement, two senior staff members will be
seconded to Western by CBCHC; the Western team will welcome one
technical engineering staff member and one finance specialist staff
member.
Mr. Patricio Varas, President and CEO of Western commented: "After two
years of working together with China Blue we have reached what we
believe is a comprehensive strategic investment as it strengthens our
financial position and provides a vision for the path forward. The
Transaction has involved a significant amount of due diligence and long
hours of work from both our teams. We are very happy to welcome Mr. Yang
to the Board and we will definitely benefit from his extensive plant
building and operating experience both at China Blue and CNOOC. In
addition, Mr. Varas stated, "With the Subscription Agreement, I believe
CBCHC and Western have created a formidable alliance and we can now look
to completing the work already underway in arranging and putting
together the financial pieces that will make the building of the
Milestone Project a reality."