DRUMMONDVILLE, QC, June 22 /CNW Telbec/ - CVTech Group Inc. (Toronto
Stock Exchange: CVT) ("CVTech" or the "Corporation") is pleased to announce
that it has completed a private placement of 3,800,000 subscription receipts
(the "Subscription Receipts") at a price of $1.60 per Subscription Receipt,
for gross proceeds of $6,080,000 (the "Subscription Receipt Financing")
pursuant to an underwriting agreement, entered into between the Corporation
and Laurentian Bank Securities Inc. ("LBS"), dated June 22, 2009. Each
Subscription Receipt is exchangeable for no additional consideration into one
common share of the Corporation.
The Corporation has also granted LBS an option to subscribe for an
additional 2,181,250 Subscription Receipts on or prior to the closing of the
acquisition by CVTech of a North American company, announced by CVTech on
February 11, 2009 (the "Acquisition").
On June 15, 2009, the Corporation and LBS entered into commitment letters
with three institutional investors who agreed to subscribe for an aggregate of
3,412,500 common shares of the Corporation at a price of $1.60 per common
share for gross proceeds of $5,460,000 (the "QSSP Private Placement"). The
QSSP Private Placement is conditional on and will close concurrently with the
closing of the Acquisition.
The Subscription Receipt Financing and the QSSP Private Placement were
first announced by the Corporation on May 29, 2009 as a bought deal private
placement for total gross proceeds of $11,510,000, which is now set to total
gross proceeds of $11,540,000 (the "Offering"). The proceeds from the Offering
will be used to fund the Acquisition.
The gross proceeds raised under the Subscription Receipt Financing will
be held in escrow until the Closing Date and will be released to the
Corporation unless the closing of the Acquisition has not occurred by August
15, 2009, in which case such gross proceeds will be returned to the holders of
the Subscription Receipts.
The Subscription Receipts and any common shares to be issued upon
conversion of the Subscription Receipts will be subject to a four-month hold
period that expires October 19, 2009.
The Subscription Receipt Financing, the QSSP Financing and the
Acquisition are subject to the final approval of the Toronto Stock Exchange.
CVTech is a management corporation. Some of its subsidiaries design,
manufacture and sell CVTs. Another subsidiary, Thiro, provides services for
the construction and maintenance of electrical transmission and distribution
lines. It has two indirect subsidiaries: Thiro USA and J.J.L. Déboisement inc.
("J.J.L.") Thiro USA, like Thiro, provides services for the construction and
maintenance of electrical transmission and distribution lines. J.J.L.
specializes in vegetation control on rights-of-way for transmission and
distribution lines. The subsidiary CVTech-AAB inc. specializes in the
rebuilding of crankshafts and reconditioning of cylinders, and the
distribution of engine parts.
CVTech is the owner of the trademarks and CVTech R&D inc. holds the
intellectual property on products which are part of its technological
CVTech currently has a staff of approximately 715 employees comprising
160 employees in the CVT systems and related products segments and 555
employees in the electricity segment.
The present document may contain forward-looking statements that reflect
the current expectations of management with regard to future events. These
forward-looking statements depend on a certain number of factors and are
subject to risks and uncertainties. The actual results could differ from those
anticipated. Management undertakes no obligation to update or revise the said
forward-looking statements on receipt of new information or subsequent to
future events other than the ones required by law.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy, which may be made only by means of a
prospectus, nor shall there be any sale of the Subscription Receipts in any
state, province or other jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under securities
laws of any such state, province or other jurisdiction. The Subscription
Receipts of CVTech have not been and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered, sold or delivered
in the United States absent registration or an application for exemption from
the registration requirements of U.S. securities laws.
For further information with regard to CVTech, the reader is invited to
consult the SEDAR database and the Corporation's Website at:
For further information:
For further information: André Laramée, MBA, President and CEO, CVTech
Group Inc., (819) 479-7771; Mario Trahan, CMA, Chief Financial Officer, CVTech
Group Inc., (819) 479-7771