McVicar Signs Letter of Intent to Sell Its Hongbo Subsidiary
TORONTO, Dec. 17, 2013 /CNW/ - McVicar Industries Inc. ("McVicar" or the "Company") today announces that its wholly-owned subsidiary McVicar (Hong Kong) Advanced Material Co., Ltd. ("McVicar HK") has signed a binding Letter of Intent ("LOI") to sell its wholly-owned subsidiary Zhejiang Hongbo Chemical Co., Ltd. ("Hongbo") to a private, Hong Kong company to be formed by a group of investors (the "Buyer"), who are also the former shareholders of Hongbo.
The LOI stipulates that the Buyer will purchase McVicar HK's 100% interest in Hongbo with the exception of Hongbo's interests in Luyuan Chemical Co., Ltd. and Anhui Linghua Co., Ltd., two indirectly-owned subsidiaries, which will be transferred to McVicar HK. In consideration for the purchase, the Buyer will surrender to the Company the approximately 6.8 million common shares of McVicar received by the Buyer on the Company's original acquisition of Hongbo in 2007. Upon receipt these shares of McVicar will be cancelled. In addition, a further RMB 2 million cash (~CDN $340,000) consideration will be paid to the Company by the Buyer, upon and subject to (i) the completion of the proposed transaction, (ii) resumption of Hongbo's operation and (iii) receipt of 80% outstanding of Hongbo's accounts receivable. Further, upon completion of the proposed transaction, the outstanding inter-company balances among the Company, Hongbo, Luyuan and Anhui will be waived by each other.
The proposed transaction is subject to customary closing conditions, including execution and delivery of all necessary agreements, releases and receipt of all required regulatory approvals.
The Company entered into the LOI after an extensive negotiation process that included in-depth discussions with the Buyer and an evaluation of the other alternatives relative to the Hongbo's current situation following the recent factory occupation.
McVicar Industries Inc., headquartered in Toronto, Canada, is focused on investments and acquisitions of businesses in China. At present, McVicar has operations in both electronic components and specialty chemicals in four operations in China.
Information set forth in this news release may involve forward-looking statements under applicable securities laws. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this document are made as of the date of this document and the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities legislation. Although Management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. This news release does not constitute an offer to sell or solicitation of an offer to buy any of the securities described herein and accordingly undue reliance should not be put on such.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
SOURCE McVicar Industries Inc.For further information:
Please contact Ms. eXavier Peterson or Gang Chai, CEO at: 55 University Avenue, Suite 605, Toronto, ON M5J 2H7 Tel: (416)366-7420 Fax (416)366-7421 www.mcvicar.ca.