Brick Brewing completes equity financing



    
    /NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE
    UNITED STATES./
    

    WATERLOO, ON, Oct. 31 /CNW/ - BRICK BREWING CO. LIMITED (the
"Corporation") (TSX: BRB) announced today that it has completed a
non-brokered, non-arms' length private placement (the "Offering") of 5,729,165
units (the "Units"), with each Unit consisting of one common share ("Common
Share") and one common share purchase warrant (a "Warrant"). The Offering was
priced at $0.48 per Unit for aggregate gross proceeds of approximately
$2,750,000. Each Warrant entitles the holder to purchase one additional common
share of the Corporation at a price of $0.71 for a five-year period from the
date of the closing of the Offering and will contain standard anti-dilution
provisions. The Offering includes the previously announced option to increase
the base offering by 10%, which was fully exercised on closing. As a result,
11,458,330 Common Shares were issued or are issuable on completion of the
Offering (assuming the full exercise of the Warrants issued), which represents
approximately 51% of the issued and outstanding Common Shares of the
Corporation prior to the Offering.
    As previously announced, the Offering was made entirely to non-arm's
length parties to the Corporation and constituted a related party transaction.
Benbrick Holdings Inc., George Croft and Kernwood Limited are currently
insiders of the Corporation and were the subscribers to the Offering.
    Benbrick Holdings Inc. ("Benbrick"), a significant shareholder of the
Corporation, prior to the Offering held 4,042,970 Common Shares representing
18.12% of the Corporation's issued and outstanding Common Shares and purchased
3,645,833 Units under the Offering, representing, including all Warrant
shares, 28% of the total issued and outstanding Common Shares prior to the
Offering. As a result of the Offering, Benbrick holds 7,688,803 Common Shares
and 3,645,833 Warrants representing, assuming the full exercise of the
Warrants, approximately 36% of the issued and outstanding Common Shares.
Concurrent with the Offering, Laurence Capital Fund III L.P. ("LCF")
subscribed for approximately $1,750,000 of additional shares of Benbrick and
Stan Dunford and Peter Schwartz, each directors of the Corporation,
concurrently subscribed for $950,585 and $399,707, respectively, of additional
units in LCF. Peter Schwartz indirectly controls Benbrick and the
aforementioned Common Shares held by Benbrick.
    Benbrick and Jim Brickman, the minority shareholder in Benbrick, as a
result of these transactions, jointly own or exercise control or direction
over, in the aggregate, 7,993,673 issued common shares of the Corporation,
which represent approximately 29% of the issued and outstanding common shares
(not including the Warrants).
    George Croft, the President and Chief Executive Officer of the
Corporation, prior to the Offering held no Common Shares and purchased
1,041,666 Units under the Offering, representing, including all Warrant
shares, 9% of the total issued and outstanding Common Shares prior to the
Offering. As a result of the Offering, Mr. Croft holds 1,041,666 Common Shares
and 1,041,666 Warrants representing, assuming the full exercise of the
Warrants, approximately 7% of the issued and outstanding Common Shares.
    Kernwood Limited, an associate of Edward H. Kernaghan who is a director
of the Corporation, prior to the Offering held 2,650,000 Common Shares
representing 11.87% of the Corporation's issued and outstanding Common Shares
and purchased 1,041,666 Units under the Offering, representing, including all
Warrant shares, 9% of the total issued and outstanding Common Shares prior to
the Offering. As a result of the Offering, Kernwood Limited holds 3,691,666
Common Shares and 1,041,666 Warrants representing, assuming the full exercise
of the Warrants, 16.3% of the issued and outstanding Common Shares.
    As previously announced, the Corporation did not obtain a valuation or
majority of the minority shareholder approval but instead relied on exemptions
from such requirements available under Multilateral Instrument 61-101 ("MI
61-101") and from the security holder approval requirements of the TSX in
Subsection 604(e) of the TSX Company Manual in cases of financial hardship. In
this regard, the Corporation's board of directors, and its independent
directors, acting in good faith, determined that the Corporation faced serious
financial difficulty and the proposed transaction was designed to improve the
financial position of the Corporation.
    The purchase by Benbrick and Kernwood Limited of the Units was made for
investment purposes and Benbrick, Jim Brickman and Kernwood Limited have no
present intention to further increase their beneficial ownership of, or
control or direction over, Common Shares. Benbrick, Jim Brickman and Kernwood
Limited may in the future take such actions in respect of their holdings as
they deem appropriate in light of the circumstances then existing, including
the purchase of additional shares or other securities of the Corporation
through open market purchases or privately negotiated transactions, or the
sale of all or a portion of their holdings in the open market or in privately
negotiated transactions to one or more purchasers.
    The securities issuable pursuant to the Offering will be subject to
regulatory hold periods under applicable law until March 1, 2009. Proceeds of
the Offering will be used for working capital and general corporate purposes.

    About Brick Brewing

    Brick Brewing Co. Limited is Ontario's largest Canadian-owned and
Canadian-based publicly held brewery. The Company is a regional brewer of
award winning premium quality and value beers. The Company, founded by
Jim Brickman in 1984, was the first craft brewery to start up in Ontario, and
is credited with pioneering the present day craft brewing renaissance in
Canada. Brick has complemented its J. R. Brickman Founder's Series and
Waterloo Dark premium craft beers with other popular brands such as Laker, Red
Cap and Formosa Springs Draft. Brick trades on the TSX under the symbol BRB.
Visit us at www.brickbeer.com.

    Forward-Looking Statements

    All statements in this press release that do not directly and exclusively
relate to historical facts constitute forward-looking statements as of the
date of this press release. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as "may", "will",
"expect", "intend", "anticipate", "seek", "plan", "believe" or "continue" or
the negatives of these terms or variations of them or similar terminology.
Although the Corporation believes that the expectations and assumptions
reflected in these forward-looking statements are reasonable, undue reliance
should not be placed on these forward-looking statements, which are not
guarantees and are subject to certain risks, uncertainties and assumptions,
which may cause actual performance and financial results to differ materially
from such forward-looking statements. The forward-looking statements included
in this press release are made only at the date of this press release and,
except as required by applicable securities laws, the Corporation does not
undertake to publicly update such forward-looking statements to reflect new
information, future events or otherwise.

    %SEDAR: 00003334E




For further information:

For further information: George Croft, President and Chief Executive
Officer, Tel: (519) 576-9519 Ext. 247, E-mail: info@brickbeer.com

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Brick Brewing Co. Limited

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