Noveko International announces the signature of a memorandum of understanding for the sale of S.A.S. E.C.M.
Deferment of the closing of the transfer of our shareholding in Noveko Algérie
BOUCHERVILLE, QC, Aug. 7, 2012 /CNW Telbec/ - Noveko International Inc. (the "Company") announces that it has signed a Memorandum of Understanding with a French corporation that intends to acquire all the shares of S.A.S. E.C.M. ("ECM"), subject to the usual conditions in this type of transactions, including especially the completion of a satisfactory due diligence of ECM. The acquisition, if completed, will be made in consideration of a total amount of €4.3 million, of which €2 million are to be paid at the closing date of the transaction, €300,000 at the latest on December 31, 2012, €1 million at the latest on December 31, 2013, and €1 million at the latest on December 31, 2014. Closing of the transaction is scheduled to occur on or about October 1st, 2012.
"While allowing us to reduce our debt, the sale of our shares of ECM is consistent with our strategy to refocus our resources in the air filtration segment" declared Mr. André Leroux, Chairman of the Board and Chief Executive Officer of the Company. Mr. Leroux added: "to maintain our participation in ECM, we would have been obliged to inject additional funds in ECM's capital, which we are not able to do considering our current financial obligations and our decision to concentrate to the utmost our resources to the air filtration segment. It is forecasted that we will continue to distribute ECM's ultrasound scanners in Canada, which would require little financial and human resources on our part, but could generate worthwhile revenues".
Furthermore, last May 24th, we announced that Mr. Patrice Emery, President of ECM, informed the Company that a group of which he was a party to had the intent to acquire the shares of ECM held by the Company at conditions to be determined. The Company wishes to point out that the above-mentioned Memorandum of Understanding was not signed with that group and that the French corporation that signed it, is a third-party acting at arm's length with the Company.
The sale of the shares of ECM by the Company is also subject to the approval of the Toronto Stock Exchange and the release by Third Eye Capital Corporation, on its own behalf and on behalf of the lenders that it represents, of the pledge they hold over the shares of ECM.
On June 27, 2012, we announced our intent to relinquish our 70% interest in Noveko Algérie in consideration for the reimbursement at the closing date of all advances made by the Company to Noveko Algérie, totalling to $1,400,000. Closing of that transaction was initially scheduled to be held at the latest on July 31, 2012. However, because of certain administrative formalities that remain to be finalized with the Algerian governmental authorities in connection with the transfer of our shares, the parties to the transaction agreed that a payment of $400,000 will be made in the next few days by the purchaser, followed by the payment of the remaining amount of $1,000,000 at the latest on September 30, 2012 if all the required authorizations are obtained; if not, the parties agreed that the closing of the transaction shall be held at the latest on December 31, 2012. Transfer of the shares shall only be effective when the total amount of $1,400,000 will have been paid to the Company. This transaction is also consistent with the refocusing of our activities in the air filtration segment.
About Noveko International Inc.
Noveko International Inc. offers innovative solutions in the environmental and medical fields worldwide. Through its subsidiaries, the Company specializes in the following business segments: the development, manufacturing and marketing of derivative products from its patented antimicrobial filtration technologies, mainly air filters, surgical masks and respirators, as well as other products with antibacterial properties, notably hand sanitizers - and the development, manufacturing and marketing of medical equipment, including portable real-time ultrasound scanners for use in human and veterinary medicine.
Certain statements set forth in this press release constitute forward-looking statements. In some cases, these statements are identified by the use of terms such as "may", "could", "might", "intend", "should", "expect", "project", "plan", "believe", "estimate" or other comparable variants. These statements are based on the information available at the time they are written, on assumptions made by management and on the expectations of management, acting in good faith, regarding future events, including those relating to economic conditions, fluctuations in exchange rates and operating expenses, and the absence of unusual events entailing supplementary expenditures. Although management considers these assumptions and expectations reasonable based on the information available at the time they are written, they could prove inaccurate. Forward-looking statements are also subject, by their very nature, to known and unknown risks and uncertainties such as those related to the industry, acquisitions, labour relations, credit, key officers, supply and product liability. The actual results of Noveko International Inc. could differ materially from those indicated or underlying these forward-looking statements. The reader is therefore recommended not to unduly rely on these forward-looking statements. Forward-looking statements do not reflect the potential impact of special items, any business combination or any other transaction that may be announced or occur subsequent to the date hereof. Unless otherwise required under securities laws, the Company does not intend and undertakes no obligation to update or revise the forward-looking statements to reflect new information, new events or new circumstances.
SOURCE: NOVEKO INTERNATIONAL INC.For further information:
Senior Vice-President and Chief Financial Officer
Noveko International Inc.
Tel: (514) 875-0606