ArPetrol Ltd. announces closing of the sale of substantially all of its assets

CALGARY, May 20, 2016 /CNW/ - ArPetrol Ltd. ("ArPetrol" or the "Company") is pleased to announce that it has successfully closed the previously announced sale of substantially all of its assets (the "Transaction") to Empresa Nacional Del Petróleo, the state owned oil and gas company of Chile, and its subsidiary ENAP Sipetrol Argentina S.A. The purchase price paid to the Company at closing of the Transaction was US$11,084,232 (approximately CAN$14.5 million), including the net working capital at closing of the subsidiaries being sold of US$2,084,232. This net working capital amount is subject to a 90-day post-closing adjustment period. In addition, US$2,250,000 of the purchase price was placed into an escrow account at closing and will be released to ArPetrol on August 19, 2016 provided that no negative adjustments to the working capital calculation or indemnity claims against the Company have arisen prior to such date that are being made against the escrowed funds.  

As a result of the completion of the Transaction, the Company no longer has active business operations or assets other than the cash proceeds from the Transaction. ArPetrol now plans to focus on the efficient winding-up of the affairs of the Company, including the distribution of the net proceeds from the Transaction to the ArPetrol shareholders (the "Shareholders"), after payment of all transaction costs and satisfaction of all outstanding liabilities of the Company, and the delisting of the common shares of the Company ("Common Shares") from the TSX Venture Exchange ("TSXV"). The Company does not intend to apply for delisting of the Common Shares from the TSXV until after the first distribution is made to Shareholders, but the TSXV may on its own initiative delist the Common Shares sooner or transfer the listing to the NEX Board.

While the ultimate amount and timing of distributions to be made to Shareholders remains uncertain as of this date, subject to the discharge of all obligations and liabilities of the Company and the operational, regulatory, audit and winding up costs of the Company up to the time of formal dissolution, it is expected that the proceeds from the Transaction will be sufficient to make distributions to the Shareholders in the aggregate range of approximately $0.59 to $0.62 per Common Share as a return of capital. The range of aggregate distributions per Common Share estimate is based on the best information available to management at the current time, but the ultimate distributions may be materially lower in the event that any significant liabilities or costs arise during the winding up and dissolution process which are not currently foreseen by the Company or its advisors.      

Further details in respect ArPetrol's expectations with respect to the timing and amount of distributions to be made to Shareholders and the timing for delisting of the Common Shares, can be found in the Company's Information Circular dated April 4, 2016 (the "Information Circular") which was mailed to Shareholders in connection with the Meeting and is available under the Company's profile on the SEDAR website at www.sedar.com.

About ArPetrol Ltd.

ArPetrol is a Calgary-based publicly traded company whose common shares are listed on the TSX Venture Exchange ("TSXV") under the symbol "RPT". The Company has completed a sale of substantially all of its assets and no longer has active business operations.

Forward-Looking Information

Certain information provided in this press release constitutes forward-looking statements and information within the meaning of applicable securities laws. Specifically, and without limitation, this press release contains forward-looking statements and information relating to the anticipated timing for delisting of the Common Shares and the expected amount of distributions to Shareholders.  Forward‐looking information typically contains statements with words such as "anticipate", "believe", "forecast", expect", "plan", "intend", "estimate", "propose", "project", or similar words suggesting future outcomes. The Company cautions readers and prospective investors in the Company's securities not to place undue reliance on forward‐looking information as, by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by the Company. In particular, liabilities, costs or obligations (including potential tax obligations) may arise, currency exchange rates may change or other events may transpire in the future not currently foreseen by the Company that may result in distributions to Shareholders that are materially lower than those discussed herein. Shareholders and potential investors are heavily cautioned against relying on the anticipated timelines or estimated amounts of distributions provided in this press release.

In respect of the forward-looking statements and information set out in this press release, the Company has provided such in reliance on certain assumptions that it believes are reasonable at this time, including assumptions as to the stability of currency exchange rates, the accuracy of estimated net working capital calculations at closing, the number of shares outstanding at the time of the distributions to Shareholders, the estimated amount of the transaction and dissolution costs and the liabilities and obligations of the Company, the estimated amount of net proceeds remaining for distribution to Shareholders and the delisting process of the TSXV.

There are a number of risk factors associated with the completion of the liquidation and dissolution of the Company, the delisting of the Common Shares and the amount and timing of distributions to be made to Shareholders that could cause actual results to differ materially from those anticipated by the Company, including but not limited to, risks of negative working capital adjustments and/or indemnity claims against the Company in connection with the Transaction, uncertainties regarding the actual transaction and dissolution costs and obligations and liabilities (including potential tax obligations) of the Company, changes in currency exchange rates and the risk of the TSXV delisting the Common Shares earlier than expected. Readers should also refer to "Forward Looking Statements" and "Meeting Matters – Approval of the Asset Sale Transaction  - Risk Factors Associated with the Asset Sale Transaction and – Approval of Voluntary Delisting of the Common Shares from the TSXV – Risk Factors for Delisting" in the Information Circular for a further discussion of the risks associated with the distributions to be made to Shareholders and the delisting of the Common Shares.

The forward-looking information included herein is expressly qualified in its entirety by this cautionary statement. The forward-looking information included herein is made as of the date hereof and the Company assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances, except as required by law.

Additional information  relating to the Company is also available on SEDAR at www.sedar.com.

Neither the TSXV nor its Regulation Services Provider (as defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

SOURCE ArPetrol Ltd.

For further information: Ian Habke, Interim President and Chief Financial Officer, i.habke@arpetrol.com, ArPetrol Ltd., Main Phone: 403-263-6738


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