NEX - GAR.H
NISKU, AB, May 31 /CNW/ - Garneau Inc. ("Garneau" or the "Corporation") (GAR.H: NEX) On May 28, 2010 the Corporation announced its President and Chief Executive Officer Glen Garneau was terminated as an employee of the Corporation, effective January 31, 2010. Subsequent to his termination, Mr. Garneau entered into a consulting agreement with the Corporation pursuant to which he provides the services of acting President and Chief Executive Officer.
On May 12, 2010, the Corporation entered into an asset purchase agreement that became effective on May 28, 2010 with Mr. Garneau (the "Agreement") pursuant to which Mr. Garneau agreed to purchase the Nisku fabrication equipment from the Corporation (the "Transaction") for a purchase price of $327,230.61 (the "Purchase Price"). Mr. Garneau has paid a deposit of $50,000 through a cash payment of $25,000 and a waiver of $25,000 of the severance owed to him as a result of the termination of his employment with the Corporation pursuant to his employment agreement. The remainder of the Purchase Price, being $277,230.61, will be deducted from the outstanding severance owed to Mr. Garneau as a result of the termination of his employment with the Corporation pursuant to Mr. Garneau's employment agreement. The Transaction is subject to regulatory approval.
Entering into the Transaction resulted from the process undertaken by the special committee (the "Special Committee") of the board of directors of the Corporation (the "Board") in the Special Committee's continuing efforts to preserve shareholder value. The Special Committee will continue in its review of strategic alternatives for Garneau, including the possible sale of the Corporation's remaining real property and equipment, which are situated in a prime industrial location in Nisku, Alberta and/or the re-organization of the Corporation to facilitate a potential corporate transaction.
Due to the Mr. Garneau's interest in the Transaction, the Transaction is a related party transaction pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Corporation is relying on the financial hardship exemption from the valuation and minority approval requirements of MI 61-101. Specifically, pursuant to subsection 5.5(g) and 5.7(e) of MI 61-101, a formal valuation and minority approval are not required in the event of financial hardship in specified circumstances. The Corporation has satisfied the elements of this exemption on the basis that the Corporation is in serious financial difficulty, that the Transaction is designed to improve the financial position of the Corporation, the Transaction is not subject to court approval nor has it been ordered under bankruptcy or insolvency law and the Special Committee, the Board and at least two-thirds of the Corporation's independent directors, all acting in good faith, have determined the foregoing circumstances are applicable and the terms of the Transaction are reasonable in the circumstances of the Corporation. The Corporation has three independent directors that are all members of the Special Committee, whom, acting in good faith, have determined that the above statements are correct and that the terms of the Transaction are reasonable in the circumstances of the Corporation.
The Corporation also announces that it has filed its unaudited consolidated financial statements and related Management's Discussion and Analysis for the three months ended March 31, 2010.
Copies of these documents are available electronically at www.sedar.com.
Certain information in this press release contains forward-looking statements. These statements relate to future events or actions. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "would" and similar expressions. These statements involve substantial known and unknown risks and uncertainties, certain of which are beyond Garneau's control, including: the impact of general economic conditions; industry conditions; changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; fluctuations in commodity prices and foreign exchange and interest rates; stock market volatility and market valuations; volatility in market prices for oil and natural gas; liabilities inherent in oil and natural gas service operations; product demand and market acceptance; the impact of competitive products and pricing; technological advancements; competition for, among other things, capital, work orders and skilled personnel; incorrect assessments of the value of acquisitions; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry; technical and processing problems and other difficulties in producing products for the petroleum exploration and production industry; and obtaining required approvals of regulatory authorities. Garneau's actual results, performance or achievement could differ materially from those expressed in, or implied by, such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do, what benefits that Garneau will derive from them. Except as required by law, Garneau undertakes no obligation to publicly update or revise any forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE GARNEAU INC.
For further information: For further information: Glen Garneau, Acting President and Chief Executive Officer, Email: firstname.lastname@example.org, Phone: (780) 955-2396, Fax: (780) 955-7715