/THIS DOCUMENT IS NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS/
CALGARY, Dec. 15 /CNW/ - BNP Resources Inc. ("BNP" or the "Corporation") and L1 Capital Corp. ("L1") announce that as of December 10, 2009, they have entered into a non-binding agreement in principle to establish a merger of the two companies (the "Transaction").
It is proposed that as a result of this Transaction all of the shares of L1 would be purchased by BNP for consideration of one unit of BNP at a deemed price of $0.10. Each unit shall consist of one Class A share of BNP and 1/2 of a warrant. Each full warrant will entitle the holder to purchase one Class A share of BNP at a price of $0.10 per Class A share until October 31, 2010. Upon completion of the Transaction, BNP thereafter would continue forward in the business of developing oil and natural gas projects. The Transaction would constitute the qualifying transaction for L1. As L1 is a capital pool corporation (CPC), L1 has not carried on any material business.
Further information and details will be provided on the deal structure in a subsequent News Release upon a further agreement confirming the terms thereof and in compliance with TSX Venture Exchange policies.
Significant Assets of the merged entity will consist of current assets of approximately $438,000, which consists primarily of cash and short term investments of L1, and the assets of BNP which have been disclosed in BNP's annual report and recently filed Q3 interim financial statements, both of which are available on SEDAR at www.sedar.com.
Class A shares of BNP issued to L1 shareholders may be subject to such escrow provisions as determined by the TSX Venture Exchange. The shares of L1 have been halted from trading and may remain halted until the completion of the Transaction. The companies will proceed to negotiate a definitive agreement regarding the Transaction and, upon signing such definitive agreement, L1 is to advance $250,000 to BNP upon approval by the TSXV.
The Transaction is an arms length transaction and will be subject to approval by L1's directors and/or shareholders. Existing shares of the founders and insiders of L1 would be subject to escrow on completion of the transaction.
The Transaction does not involve any financing arrangements. Key conditions yet to be met in order to complete this transaction are:
- L1 to have no less than $390,000 in assets at the time of closing;
- BNP's officers and directors agree to irrevocably support the
Transaction and not solicit other transactions that would prevent the
foregoing from closing.
The current and proposed insiders of BNP upon completion of the Transaction will be Gregory Bilcox President and CEO and a Director, Edward Nunes-Vaz Vice President of Land and Business Development and a Director, Greg Turnbull, Director and John Brown, Director. In addition, a nominee of L1 will be appointed to the Board of BNP. Additionally, the CFO position is vacant pending appointment of a replacement after the recent resignation of Ms Louie.
Additionally, James Evans Doody, of Calgary, had acquired a 10.5% interest in BNP and filed a notice respecting that acquisition effective Dec. 7, 2009. Information respecting the above BNP Directors is available on BNP's website www.bnpresources.com. Information regarding L1 and BNP can be obtained at www.sedar.com.
BNP is actively engaged in the exploration for and the development and production of oil and natural gas reserves. BNP's business strategy is to build sustainable and profitable per share growth through internally generated exploration and development drilling.
BNP is an Alberta based company incorporated under the laws of the Province of Alberta. BNP has approximately 25,035,834 Class A and 922,500 Class B basic shares issued and outstanding which trade on the TSX Venture Exchange under the symbols "BNX.A and "BNX.B". L1 has 3,950,000 basic common shares issued.
Completion of the foregoing transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the foregoing transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
Neither the TSX Venture Exchange nor Its Regulation Services Provider (as the term is defined In the Policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE BNP Resources Inc.
For further information: For further information: Gregory Bilcox, President and CEO, BNP Resources Inc., Phone: (403) 695-1091, Fax: (403) 265-0413; Gordon R. Travis, President & CEO, L1 Capital Corp., Phone: (403) 338-1001