/NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES/
ROAD TOWN, Tortola, British Virgin Islands, July 23, 2012 /CNW/ - CIC
Energy Corp. ("CIC Energy" or the "Company") (TSX:ELC, BSE:CIC Energy)
is pleased to announce that it has entered into a binding merger
agreement (the "Merger Agreement") with Jindal Steel & Power
(Mauritius) Limited ("Jindal"), a wholly owned subsidiary of Jindal
Steel and Power Limited ("JSPL"), and Jindal (BVI) Ltd. ("Jindal BVI"),
a wholly-owned subsidiary of Jindal. JSPL is listed on the National
Stock Exchange and the Bombay Stock Exchange.
Under the terms of the Merger Agreement, CIC Energy will merge with
Jindal BVI, with Jindal BVI being the surviving entity (the "Merger").
Upon completion of the Merger, the holders of the outstanding shares of
CIC Energy will receive CDN$2.00 per share (the "Consideration"). The
Consideration represents a premium of 65% to the volume-weighted
average trading price for CIC Energy's shares on the TSX for the
30-trading day period ending on July 17, 2012, the last trading day
prior to the announcement of the indicative price. It also represents a
premium of 42% to the closing price of CIC Energy's shares on the TSX
on July 17. The Consideration values the total equity of CIC Energy at
approximately CDN$116.0 million on 58.0 million shares (including all
common shares and excluding all options and all unvested warrants).
The Board recommends acceptance of the Merger by CIC Energy
"In the current challenging economic and capital markets environment, we
believe that this offer provides fair value for CIC Energy
shareholders," said Mr. Warren Newfield, Chairman and CEO of CIC
The Board formed a special committee (the "Special Committee"),
comprised of E. Adrian Meyer, Deenadayalen (Len) Konar, and Michael
Movsas (all of whom are independent directors of the Company), to
review the merits of the Merger and, to consider available alternatives
to maximize shareholder value and to make recommendations to the Board,
and, if appropriate, to the shareholders of the Company. The Special
Committee determined that the Merger was in the best interest of the
Company and that it would recommend that the Board approve the Merger.
The Merger has been approved by the board of directors of Jindal and
CIC Energy will be holding a special meeting of shareholders (the
"Meeting") to consider and approve the Merger. The Meeting is scheduled
to be held on or before August 28, 2012. The record date is
July 9, 2012.
The Company has agreed to customary standstill undertakings not to
solicit or invite alternative acquisition proposals and right to match
covenants in favour of Jindal. Such undertakings, however, would not
prevent the Board from discharging its fiduciary duties in the event it
receives unsolicited superior acquisition proposals. CIC Energy has
agreed to pay Jindal a termination fee of approximately CDN$3.5 million
if the Merger is not completed in certain circumstances and to
reimburse Jindal's Merger-related expenses in certain circumstances,
and Jindal has agreed to pay the Company a termination fee of
approximately CDN$3.5 million if the Merger is not completed in certain
The Merger Agreement provides for an outside date of October 9, 2012 for
the completion of the Merger.
The completion of the Merger remains subject to the satisfaction of
certain conditions, including, but not limited to, receipt of all
requisite regulatory approvals in Botswana (including the receipt of
certain approvals from the Minister of Minerals, Energy and Water
Resources and under the Botswana Competition Act) and the absence of
any material adverse changes respecting the Company.
The Merger Agreement will be available under CIC Energy's SEDAR profile
shortly at www.sedar.com.
Deutsche Bank Securities Inc. is acting as financial advisor to CIC
Energy in connection with the transaction and has provided the Board
with an opinion regarding the consideration to be received by CIC
Energy shareholders (other than Jindal and its affiliates) in the
proposed transaction. Deutsche Bank's opinion was prepared solely for
the exclusive use of the Board of CIC Energy in its consideration of
the Merger Agreement and cannot be used or relied upon for any other
purpose or by any other person, including any shareholder of CIC
Energy. A copy of Deutsche Bank's written opinion, which contains the
assumptions, limitations, qualifications and conditions set forth
therein, will be included in the information circular to be sent to CIC
Energy shareholders in connection with the Meeting to consider and
approve the Merger.
About CIC Energy Corp.
CIC Energy Corp. is engaged in the advancement of the Mmamabula Energy
Complex at the Mmamabula Coal Field in Botswana, Africa. This planned
Complex consists of an Export Coal Project, one or more Power Projects,
and a potential Coal-to-Hydrocarbons Project.
CIC Energy has a treasury of approximately CDN$14.8 million and has
58,012,127 shares outstanding and 76,804,075 shares fully diluted
including 13,061,448 warrants which have not vested. CIC Energy is listed on the Toronto
Stock Exchange (TSX:ELC) and the Botswana Stock Exchange (BSE:CIC
About Jindal Steel & Power Limited (JSPL)
JSPL is one of India's major steel producers with a significant presence
in the mining, power generation and infrastructure sectors.
With annual revenue of over US$3.5 billion, JSPL is a part of the US$15
billion diversified D.P. Jindal Group and is consistently tapping new
opportunities by increasing production capacity, diversifying
investments, and leveraging its core capabilities to venture into new
businesses. The company has committed to future investments which
exceed US$30 billion.
For more information visit www.jindalsteelpower.com
This news release contains certain "forward-looking information". All
statements, other than statements of historical fact, that address
activities, events or developments that CIC Energy believes, expects or
anticipates will or may occur in the future are forward looking
information. Such forward looking information reflects the current
expectations or beliefs of CIC Energy based on information currently
available to CIC Energy. Such forward-looking information includes,
among other things, statements regarding the structure and timing of
the Merger and the Company's belief that the terms of the Merger will
provide fair value for CIC Energy shareholders in the current
environment. Forward-looking information is subject to significant
risks and uncertainties and other factors that could cause the actual
results to differ materially from those discussed in forward-looking
information, and even if such actual results are realized or
substantially realized, there can be no assurance that they will have
the expected consequences to, or effects on, CIC Energy or its
Factors that could cause actual results or events to differ materially
from current expectations include, but are not limited to, alternative
transactions involving third parties which may result in the
termination of the Merger Agreement and/or the terms of the Merger
Agreement being changed, the failure to achieve any of the anticipated
benefits of the Merger, the failure of the parties to satisfy the
conditions precedent to the completion of the Merger (including, but
not limited to, the failure to obtain any required governmental or
regulatory approvals and the occurrence of a material adverse change
respecting the Company), and other factors.
Forward-looking information speaks only as of the date on which it is
made and, except as may be required by applicable securities laws, CIC
Energy disclaims any intent or obligation to update any forward-looking
statement, whether as a result of new information, future events or
results or otherwise. Although CIC Energy believes that the
assumptions inherent in forward-looking information (including, without
limitation, that the conditions to Jindal BVI completing the Merger are
satisfied within the times required) are reasonable, forward-looking
statements are not guarantees of future performance and accordingly,
undue reliance should not be put on such statements due to the inherent
SOURCE: CIC Energy Corp.
For further information:
Erica Belling, CFA, P.Eng.
VP Investor Relations
Tau Capital Corp.
Tel: (416) 361-9636 x 243