/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE
U.S./
CALGARY, Sept. 3, 2013 /CNW/ - Novus Energy Inc. ("Novus" or the "Company") (TSXV: NVS) is pleased to announce that it has entered into a
definitive agreement (the "Arrangement Agreement") with Yanchang Petroleum International Limited ("Yanchang Petroleum International") and Yanchang International (Canada) Limited ("Yanchang Canada", and, together with Yanchang Petroleum International, the "Purchaser Parties") for the purchase of all of the issued and outstanding common shares
of the Company (the "Common Shares") at a cash price of C$1.18 per Common Share. The total transaction
value, including net debt and transaction costs, is approximately C$320
million. The transaction is to be completed by way of a plan of
arrangement under the Business Corporations Act (Alberta) (the "Arrangement"). The consideration offered for the Common Shares pursuant to the
Arrangement represents a 40% premium over the closing price of the
Common Shares on the TSX Venture Exchange on August 27, 2013, the last
trading day of the Common Shares prior to the subsequent halt thereof,
and a 44% premium over the 1-month volume weighted average trading
price of the Common Shares on the TSX Venture Exchange.
Yanchang Canada, formed for the purpose of completing the Arrangement,
is wholly owned by Yanchang Petroleum International (Hong Kong Stock
Code: 00346). Yanchang Petroleum International is a Hong Kong listed
public company and is principally engaged in the exploration,
exploitation and operation of oil and gas fields and refined oil
wholesale and retail businesses. Shaanxi Yanchang Petroleum (Group)
Co., Limited ("Yanchang Petroleum Group"), the fourth largest oil producer in China with more than 100 years of
history, is the largest shareholder of Yanchang Petroleum International
and has majority representation on the Board of Directors of Yanchang
Petroleum International. In 2012, Yanchang Petroleum Group achieved
annual revenue of RMB 162 billion (approximately US$25 billion) and is
the largest enterprise in Shaanxi province in terms of annual revenue.
The Arrangement
The Arrangement is subject to customary conditions for a transaction of
this nature, which include court and regulatory approvals, the approval
of 66 2/3% of the votes cast by Novus shareholders represented in
person or by proxy at a meeting of Novus shareholders to be called to
consider the Arrangement and a simple majority of votes cast by Novus
shareholders represented in person or by proxy and entitled to vote
after excluding the votes required by Multilateral Instrument 61-101
and approval of the TSX Venture Exchange. The Arrangement also requires
a simple majority of votes cast by Yanchang Petroleum International's
shareholders, in person or by proxy, at a meeting to be called to
consider the Arrangement.
The Arrangement is subject to approval by the State-owned Assets
Supervision and Administration Commission of the State Council ("SASAC") of the People's Republic of China, and other customary approvals from
governmental entities in the People's Republic of China. The
Arrangement is conditional upon Yanchang Petroleum International
finalizing financing arrangements.
On August 28, 2013, Yanchang Petroleum International entered into a
subscription agreement with Yanchang Petroleum Group (Hong Kong) Co.,
Limited ("Yanchang Petroleum HK") (a wholly-owned subsidiary of Yanchang Petroleum Group), pursuant to
which Yanchang Petroleum HK has conditionally agreed to subscribe for
and Yanchang Petroleum International has conditionally agreed to issue
a convertible bond in the aggregate principal amount of
HK$1,600,000,000 (approximately C$217 million). The proceeds from the
issuance of the convertible bond will provide additional financing for
the Arrangement. In addition, Yanchang Petroleum Group has indicated
its willingness to provide additional financial support to complete the
financing in the event it is required by Yanchang Petroleum
International.
An information circular regarding the Arrangement is expected to be
mailed to shareholders of Novus in October 2013 for an annual and
special meeting of the holders of Common Shares scheduled to take place
in November 2013. Closing of the Arrangement is expected to occur prior
to the end of December 2013, subject to extension in certain
circumstances.
The Company has agreed in the Arrangement Agreement that it will not
solicit or initiate discussions regarding any other business
combination or sale of material assets. The Company has also granted
the Purchaser Parties a right to match competing unsolicited proposals.
Pursuant to the Arrangement Agreement, a termination fee of C$10
million will be payable by the Company in certain circumstances,
including if the Company enters into an agreement with respect to a
superior proposal or if the Board of Directors of the Company withdraws
or modifies its recommendation with respect to the proposed
transaction. In addition, a termination fee of C$5 million will be
payable to the Company if the Arrangement is not completed due to
failure to obtain required approvals of governmental bodies in the
People's Republic of China or if Yanchang Petroleum Group, as the major
shareholder of Yanchang Petroleum International, fails to vote in
favour of the Arrangement at the meeting of Yanchang Petroleum
International's shareholders. Furthermore, a termination fee of C$7.5
million will be payable to the Company if the Arrangement is not
completed due to the failure by the Purchaser Parties to obtain
required financing for the Arrangement.
A copy of the Arrangement Agreement will be filed on Novus' SEDAR
profile and will be available for viewing at www.sedar.com.
Recommendation of the Board of Directors
On December 4, 2012, Novus announced it had retained financial advisors
to assist the Special Committee of the Board of Directors in exploring
and evaluating a broad range of options to optimize shareholder value.
Technical presentations commenced during the third week of January 2013
for interested and qualified parties who had entered into a
confidentiality agreement with Novus. Following an extensive review and
analysis of the proposed transaction and consideration of other
available alternatives, the Board of Directors of Novus, after
consulting with its financial and legal advisors, has unanimously
approved the Arrangement and unanimously determined that the
transaction is in the best interests of Novus. The Board of Directors
of Novus unanimously recommends that all Novus shareholders vote in
favour of the Arrangement at the shareholder meeting to be called to
consider the Arrangement.
The Board of Directors and officers of Novus intend to vote their
respective Common Shares in favour of the Arrangement, and have entered
into support agreements with Yanchang Canada pursuant to which they
have agreed to, among other things, vote their Common Shares in favour
of the Arrangement.
Yanchang Petroleum Group, the largest shareholder of Yanchang Petroleum
International, has conveyed its intention to vote its shares in favour
of the Arrangement at the meeting of Yanchang Petroleum International's
shareholders.
Advisors
Cormark Securities Inc. ("Cormark"), as lead, and FirstEnergy Capital Corp. ("FirstEnergy") are acting as financial advisors to Novus in the transaction. GMP
Securities L.P. is acting as special advisor to the Special Committee
of the Novus Board of Directors. Canaccord Genuity Corp. and Haywood
Securities Inc. are acting as strategic advisors to Novus. Blake,
Cassels & Graydon LLP is acting as legal counsel to Novus.
Cormark and FirstEnergy have each provided the Board of Directors of
Novus with their verbal opinions that, as of the date of the
Arrangement Agreement and subject to review of final documentation, the
consideration to be received by the holders of Common Shares under the
written Arrangement is fair, from a financial point of view, to such
holders. A copy of each financial advisor's opinion will be included in
the information circular to be sent to Novus shareholders for the
special meeting to be called to consider the Arrangement.
About Yanchang Petroleum International Limited
Yanchang Petroleum International is principally engaged in the following
operations (i) investment in oil, natural gas and energy related
businesses; (ii) exploration, exploitation and operation of oil and
gas; and (iii) fuel oil trading and distribution. In its upstream
operations, Yanchang Petroleum International holds a 100% stake in
Block 3113 and Block 2104 in the Republic of Madagascar. In its
downstream operations, Yanchang Petroleum International is principally
engaged in wholesale, retail, storage and transportation of oil
products and has been granted valid licenses for distribution and sales
of oil products in China. Yanchang Petroleum International currently
owns storage facilities with a total area of 209 mu (approximately 14
hectares) and capacity of 120,000 cubic meters, a 2,500-meter private
railway, a retail network of 10 refueling stations, and has
distribution and sales capability for processing up to 2,000,000 tons
of oil products per year. In the first half of 2013, Yanchang Petroleum
International achieved its operating target of sales volumes of over
900,000 tons of oil products and sales revenue of over HK$8 billion
(approximately US$1 billion) for its oil product operation in China.
For details, please refer to www.yanchangpetroleum.com.
About Shaanxi Yanchang Petroleum (Group) Co., Limited
Yanchang Petroleum Group is principally engaged in oil and gas
exploration, exploitation, processing, pipeline transportation and
sales of oil and gas; chemical engineering of oil, gas and coal,
machinery manufacturing, project construction and oil and gas research
and development. Yanchang Petroleum Group owns the right for
exploration, exploitation and operation of oil and natural gas
resources and has refining facilities in China, and owns oil and
natural gas resource assets in China and abroad. In 2012, Yanchang
Petroleum Group produced 12.54 million tons of crude oil, processed 14
million tons of crude oil and produced 256 million cubic meters of
natural gas, and achieved annual revenue of RMB162 billion
(approximately US$25 billion). Yanchang Petroleum Group, CNPC, Sinopec
and CNOOC are the largest four enterprises in China which own and have
the right to explore oil and gas resources in China, and Yanchang
Petroleum Group is the sole petroleum enterprise with more than 100
years of history. Based on Fortune 500 listing issued in 2013,
Yanchang Petroleum Group ranks No. 464 amongst the top 500 companies in
the world and No. 183 in terms of earnings. For details, please refer
to www.sxycpc.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
This news release will not constitute an offer to sell or the
solicitation of an offer to buy the securities in any jurisdiction.
Such securities have not been registered under the United States
Securities Act of 1933 and may not be offered or sold in the United
States, or to a U.S. person, absent registration, or an applicable
exemption therefrom.
Advisory Regarding Forward Looking Statements
Certain disclosures set forth in this press release constitute
forward-looking statements. Any statements contained herein that are
not statements of historical facts may be deemed to be forward-looking
statements. Forward-looking statements are often, but not always,
identified by the use of words such as "anticipate", "believes",
"budget", "continue", "could", "estimate", "forecast", "intends",
"may", "plan", "predicts", "projects", "should", "will" and other
similar expressions. More particularly and without limitation, this
press release contains forward-looking statements concerning: the
anticipated benefits of the Arrangement to Novus and its shareholders;
the timing and anticipated receipt of regulatory, court, shareholder
and other approvals for the Arrangement; the ability of Novus and
Yanchang Petroleum International to satisfy the other conditions to,
and to complete, the Arrangement; and the anticipated timing of mailing
of the information circular regarding the Arrangement, the Novus
shareholder meeting and the closing of the Arrangement.
In respect of the forward-looking statements and information concerning
the anticipated completion of the proposed Arrangement and the
anticipated timing for completion of the Arrangement, Novus has
provided such in reliance on certain assumptions that it believes are
reasonable at this time, including assumptions as to the time required
to prepare and mail Novus shareholder meeting materials, including the
required information circular; the ability of the parties to receive,
in a timely manner, the necessary regulatory, court, shareholder and
other third party approvals; and the ability of the parties to satisfy,
in a timely manner, the other conditions to the closing of the
Arrangement. These dates may change for a number of reasons, including
unforeseen delays in preparing meeting materials, inability to secure
necessary shareholder, regulatory, court or other third party approvals
in the time assumed or the need for additional time to satisfy the
other conditions to the completion of the Arrangement. Accordingly,
readers should not place undue reliance on the forward-looking
statements and information contained in this press release concerning
these times.
Risks and uncertainties inherent in the nature of the Arrangement
include the failure of Novus or Yanchang Petroleum International to
obtain necessary shareholder, regulatory, court and other third party
approvals, or to otherwise satisfy the conditions to the Arrangement,
in a timely manner, or at all. Failure to so obtain such approvals, or
the failure of Novus or Yanchang Petroleum International to otherwise
satisfy the conditions to the Arrangement, may result in the
Arrangement not being completed on the proposed terms, or at all. In
addition, the failure of Novus to comply with the terms of the
Arrangement Agreement may result in Novus being required to pay a
non-completion or other fee to Yanchang Petroleum International, the
result of which could have a material adverse effect on Novus'
financial position and results of operations and its ability to fund
growth prospects and current operations.
Forward-looking statements relate to future events and/or performance
and although considered reasonable by Novus at the time of preparation,
may prove to be incorrect and actual results may differ materially from
those anticipated in the statements made. Novus does not undertake any
obligation to publicly update forward-looking information except as
required by applicable securities law.
Readers are cautioned that the foregoing list of factors is not
exhaustive. Additional information on these and other factors that
could affect Novus' operations or financial results are included in
reports on file with applicable securities regulatory authorities and
may be accessed through the SEDAR website (www.sedar.com), and at Novus' website (www.novusenergy.ca). The forward-looking statements and information contained in this
press release are made as of the date hereof and Novus undertakes no
obligation to update publicly or revise any forward-looking statements
or information, whether as a result of new information, future events
or otherwise, unless so required by applicable securities laws.
SOURCE: Novus Energy Inc.
