G.T.M. Capital Corporation and Feronia Inc. announce details of qualifying

TORONTO, July 29 /CNW/ - G.T.M. Capital Corporation ("GTM" or the "Corporation") and Feronia Inc. ("Feronia") are pleased to provide further details regarding the previously announced proposed qualifying transaction (the "Proposed Transaction"), pursuant to the terms of a definitive acquisition agreement (the "Definitive Agreement") dated March 17, 2010 between GTM, certain of its principal shareholders and Feronia.


Pursuant to the terms of the Definitive Agreement, the Proposed Transaction will be completed by way of a share exchange offer (the "Offer") and a merger under the laws of the Cayman Islands whereby Feronia PHC Limited, being a wholly-owned subsidiary of GTM ("GTM Sub") shall merge with Feronia, with the separate existence of GTM Sub to cease and with Feronia to be the surviving corporation (the "Merger"). As a result of the Offer and Merger, the holders of the issued and outstanding common shares in the capital of Feronia (the "Feronia Common Shares") will receive one common share in the capital of GTM (the "Common Shares") for each one Feronia Common Share. On or immediately prior to the closing of the Offer, the Common Shares will be consolidated by a ratio of 3.5:1 (the "Consolidation").

Although the Proposed Transaction will result in Feronia becoming a wholly-owned subsidiary of the Corporation, the Proposed Transaction will constitute a reverse take-over of the Corporation inasmuch as the former shareholders of Feronia will own a substantial majority of the outstanding shares of the Corporation and all of the members of the board of directors of the Corporation will be designees of Feronia. Upon completion of the Proposed Transaction, the resulting issuer (the "Resulting Issuer") will be a large-scale commercial agriculture company focusing on palm oil plantations and arable farmland operations in the Democratic Republic of Congo (the "DRC").

Assuming satisfaction of the Release Conditions (as defined below under the section heading "Feronia Private Placement") and thus completion of the Feronia Private Placement, there are currently 98,916,740 Feronia Common Shares issued and outstanding, warrants (the "Feronia Warrants") outstanding to purchase up to 29,222,512 Feronia Common Shares, broker warrants (the "Feronia Broker Warrants") outstanding to purchase up to 3,266,701 Feronia Common Shares, and options (the "Feronia Options") outstanding to purchase up to 7,400,000 Feronia Common Shares.

Upon completion of the Proposed Transaction and assuming completion of the Feronia Private Placement, an aggregate of 99,290,740 Common Shares will be issued and outstanding, consisting of 98,916,740 Common Shares issued to holders of Feronia Common Shares in connection with the Proposed Transaction and 374,000 Common Shares (post-Consolidation) currently held by shareholders of the Corporation. The Feronia Warrants will be exchanged for GTM warrants (the "GTM Warrants") representing the right to acquire an aggregate of 29,222,512 Common Shares and the Feronia Broker Warrants will be exchanged for GTM broker warrants representing the right to acquire an aggregate of 3,266,701 Common Shares. The Feronia Options will be exchanged for GTM options representing the right to acquire an aggregate of 7,400,000 Common Shares. In addition, options to purchase an additional 500,000 Common Shares are to be granted to an officer of the Resulting Issuer at the completion of the Proposed Transaction. Thus, on a fully diluted basis, there will be 139,679,953 Common Shares outstanding. The Common Shares issued by the Corporation to holders of Feronia Common Shares have a deemed price of $0.40 per Common Share (post-Consolidation).

After the completion of the Proposed Transaction, the current shareholders of the Corporation will own, on a non-diluted basis, approximately 0.4%, and the Feronia Shareholders will own approximately 99.6%, of the issued and outstanding Common Shares of the Resulting Issuer. It is anticipated that Navina Asset Management Inc. ("Navina"), a money management firm based in Toronto, Ontario, will have control or direction over an aggregate of 35,839,090 Common Shares (or 36.1% of the issued and outstanding Common Shares upon completion of the Proposed Transaction) held by various Navina funds.

In connection with the Proposed Transaction, GTM will apply to list the Common Shares and certain of the GTM Warrants on the TSX Venture Exchange (the "Exchange"). Listing will be subject to GTM fulfilling all of the listing requirements of the Exchange. It is anticipated that upon completion of the Proposed Transaction, the Resulting Issuer will meet the Tier 1 listing requirements of the Exchange.

The Proposed Transaction is subject to compliance with all necessary regulatory approvals and certain other terms and conditions.


On May 25, 2010 and June 4, 2010, Feronia completed a brokered private placement (the "Feronia Private Placement") of an aggregate of 51,945,024 subscription receipts (the "Feronia Subscription Receipts") at a subscription price of $0.40 per Feronia Subscription Receipt for aggregate gross proceeds of $20,778,010. Proceeds from the Feronia Private Placement in the amount of $3,400,000 have already been advanced to Feronia, while the balance of the proceeds in the aggregate amount of $17,378,010 has been deposited with Equity Transfer & Trust Company (the "Feronia Subscription Receipt Agent") until the satisfaction of the following conditions (the "Release Conditions"):

    1.  written conditional approval by the Exchange of the Proposed
        Transaction and for the listing of the Common Shares, including the
        Common Shares issuable in connection with the Proposed Transaction
        and the Common Shares issuable upon exercise of certain of the GTM
        Warrants, shall have been obtained (the "Exchange Letter");

    2.  the Corporation and Feronia having confirmed in writing that (a) all
        conditions under the Definitive Agreement in respect of the Proposed
        Transaction have been satisfied or waived and (b) all conditions in
        the Exchange Letter (other than the delivery of the post-closing
        items referred to therein) have been or will be satisfied prior to
        the completion of the Proposed Transaction; and

    3.  all requisite shareholder approvals by the Corporation and Feronia in
        respect of the Proposed Transaction shall have been obtained.

Following the satisfaction or waiver of the Release Conditions (the "Release Event") and release of the proceeds from the Feronia Private Placement to Feronia, each Feronia Subscription Receipt shall convert into one Feronia Common Share and one-half of one Feronia Warrant, without payment of additional consideration. At the effective time of the completion of the Proposed Transaction, the Feronia Common Shares and Feronia Warrants acquired upon conversion of the Feronia Subscription Receipts will be exchanged for Common Shares and GTM Warrants without payment of any additional consideration. In the event that the Release Conditions have not been satisfied or waived prior to 5:00 p.m. (Toronto time) on September 22, 2010, each of the Subscription Receipt Agent and Feronia shall be obligated to return the subscription funds being held by it to the applicable holders of the Feronia Subscription Receipts together with any interest earned thereon, and such Feronia Subscription Receipts shall be automatically cancelled and be of no further force and effect. The GTM Warrants shall be governed by the terms of a warrant indenture to be entered into between the Corporation and Equity Transfer & Trust Company.

Cormark Securities Inc., as lead agent, together with Wellington West Capital Markets Inc. (collectively, the "Feronia Agents") will, upon satisfaction of the Release Conditions, receive cash commission of 6% of the aggregate gross proceeds of the Feronia Private Placement and have also been issued the Feronia Broker Warrants. The Feronia Agents will also be reimbursed for their reasonable expenses.


Feronia is a large-scale commercial agricultural company incorporated under the laws of the Cayman Islands with its registered office in Grand Cayman, Cayman Islands and offices/facilities in Toronto, Canada and Kinshasa, DRC. Feronia is currently focused on two operations in the DRC: palm oil plantations and arable farmland. Founded in 2008, Feronia is engaged in acquiring and consolidating farm land and operations in Africa and rehabilitating them back into production using modern agricultural techniques and practices.

In May 2009, Unilever plc commenced the process of selling its holdings of 76% of the outstanding shares of Plantations et Huileries du Congo SARL ("PHC") by an international tender process, pursuant to which approximately 100 companies expressed an interest and Feronia's tender was accepted. On September 3, 2009, Feronia completed the share purchase and currently holds, directly or indirectly, 76% of the outstanding shares of PHC, with the remaining 24% of the outstanding shares of PHC held by the federal government of DRC. PHC is an oil palm plantation company with a concession of 101,455 hectares located in the provinces of Equateur and Orientale in the DRC. Since its acquisition of the shares of PHC, Feronia has embarked on a program of rehabilitation of the palm oil mills and the internal road system, increasing production at the plantations on a month by month basis.


The following tables set forth selected historical financial information for Feronia as at and for the three-month period ended March 31, 2010, the year ended December 31, 2009 and the five-month period ended December 31, 2008:

    Balance Sheet Data     As at March 31,   As at December    As at December
          (US$)                 2010            31, 2009          31, 2008
                            (unaudited)         (audited)         (audited)
    Current Assets          US$1,788,886      US$2,018,555        US$390,015
    Total Assets               8,409,385         8,203,264           391,639
    Total Liabilities          9,734,250         8,200,777           912,362
    Shareholders' Equity      (1,324,865)            2,487          (520,723)

    Income Statement Data  Three Months Ended  Year Ended   Five Months Ended
          (US$)              March 31, 2010    December 31,    December 31,
                              (unaudited)     2009 (audited)   2008 (audited)
    Revenue                   US$684,837      US$1,508,023                 -
    Cost of sales                590,180         1,494,628                 -
    Gross margin                  94,657            13,395                 -
    Operating expenses         2,030,474         2,478,014        US$520,823
    Income (loss) from
    continuing operations     (1,935,817)       (2,464,619)         (520,823)
    Other income (loss)          (29,536)       (5,125,372)                -
    Net income (loss)         (1,965,353)       (7,589,991)         (520,823)

The following tables set forth selected historical financial information for PHC as of and for the years ended December 31, 2009, 2008 and 2007:

    Balance Sheet Data    As at December    As at December    As at December
         (US$)               31, 2009          31, 2008         31, 2007
                             (audited)       (unaudited)      (unaudited)
    Current Assets          US$1,827,141      US$2,818,068      US$2,980,456
    Total Assets               5,714,109         5,411,417         4,926,152
    Total Liabilities          9,246,062        11,943,274        10,687,945
    Shareholders' Equity      (3,531,953)       (6,531,857)       (5,761,793)

    Income Statement        As at December   As at December   As at December
         Data                  31, 2009         31, 2008         31, 2007
         (US$)                 (audited)      (unaudited)      (unaudited)
    Revenue                 US$3,055,443      US$5,618,534      US$6,245,300
    Cost of sales              3,917,581         4,268,047         3,999,457
    Gross margin                (862,138)        1,350,487         2,245,843
    Operating expenses         4,852,530         3,670,089         3,774,835
    Income (loss) from
    continuing operations     (5,714,668)       (2,319,602)       (1,528,992)
    Other income (loss)        6,805,241         1,549,538           535,219
    Net income (loss)          1,090,573          (770,064)         (993,773)


The board of directors of the Resulting Issuer upon completion of the Proposed Transaction will be comprised of the following persons: Ravi Sood, Stephen D. Cashin, Philip Condon, Nigel Gourlay, Barnabe Kikaya bin Karubi, George Mihaleto and James Siggs. Brief biographies for the proposed directors and senior officers of the Resulting Issuer are set out below:

Ravi Sood, Chairman (Non-Executive)

Ravi Sood is the Chief Executive Officer of Navina and has led the investment activities of Navina and its predecessor company, Lawrence Asset Management Inc., since its founding in 2001. Mr. Sood has been a founder of, and the principal investor in several successful resource-based businesses in Africa and currently serves as a director of several public and private companies operating in the agriculture, mining, and oil & gas sectors. Mr. Sood was educated at the University of Waterloo (B.Mathematics) where he was a Descartes Fellow and the recipient of numerous national awards.

Stephen D. Cashin, Director

Mr. Cashin is founder and CEO of Pan African Capital Group, LLC, managing pools of capital for investment in the African markets and providing advice to US and African corporations as well as individual investors in African markets and companies. Investments target the financial services, technology, and manufacturing fields with target investment size between one and five million dollars. Mr. Cashin was founder and Managing Director of Modern Africa Fund Managers, LLC in Washington DC, prior to which he opened the Equator Bank office in Nairobi, Kenya where he managed relationships throughout East Africa. Mr. Cashin serves on the boards of Databank in Ghana, the Investment Bank of Liberia, and Discoverytel. In addition, he is active on the boards of non-profit organizations focusing on Africa such as Africare, the African Wildlife Foundation, and the Jesuit Refugee service. Mr. Cashin is also an active member of the Corporate Council on Africa. Mr. Cashin began his career as a Peace Corps volunteer in 1979 in Tanzania. He graduated from the School of Foreign Service at Georgetown University and has his MBA from Boston College.

Philip Condon, Director

Philip Condon is currently a founding partner of Equeco Resources. He has broad international primary industry experience covering project development through to operational management over 22 years. Responsibilities have included senior corporate management (GM, CEO), project management, engineering and operations management, maintenance management, training and consulting across a wide variety of development projects at all levels of corporate involvement from the workshop floor to the board room of publicly listed companies within Australia, Ghana, Indonesia, United States and Oman. He is experienced in project development, completion, operational start-ups and the effective and efficient management of operational mining corporations. Mr. Condon holds a Bachelors Degree in Engineering (mechanical) from New South Wales University, a Masters of Business Administration from Deakin University and is a member of the Australian Institute of Company Directors.

Nigel Gourlay, Director

Nigel Gourlay is a chartered accountant and holds a degree in Agricultural Economics at London University. He has been a partner of Animos LLP since 2002. Prior to that, Mr. Gourlay spent over 20 years with British American Tobacco PLC and was responsible for global acquisitions and joint ventures.

Barnabé Kikaya bin Karubi, Director

H.E. Ambassador Barnabé Kikaya bin Karubi has served as a Member of Parliament and the DRC's Ambassador to the UK. Previously he was Minister of Information and Press, serving also as official government spokesman. He has also served as Personal Assistant to the President of the DRC and as Ambassador to Zimbabwe with additional responsibility for Namibia and Botswana. He is an accomplished international businessman and holds a PhD in Political Science and Journalism.

George Mihaleto, Director

George Mihaleto qualified and practiced as an Attorney of law in South Africa before joining Glencore International AG as a commodity trader and comes with extensive international experience in commodity trading and resource marketing. At Glencore he traded base metals, Ferro alloys and bulk products throughout Africa. He then joined AngloVaal Mining (now African Rainbow Minerals) as VP Marketing responsible for development of the companies worldwide Base Metal and Cobalt marketing operations. After immigrating to Canada he became a partner in a private commodity trading company and consulting to a number of resource companies on the TSX before joining Gryphon Partners, an independent investment bank providing advisory services in strategy, M&A and restructuring to mining companies around the world. George is a member of the board of directors of Odyssey Resources Limited.

James Siggs, Chief Executive Officer and Director

James Siggs has been the CEO of Feronia since the company was founded in 2008. Mr. Siggs gained a BSc. in Agricultural Economics from Wye College, University of London and then an MBA from Henley Management College. He started his career managing large scale arable farms in the UK, before joining the Harrisons & Crosfield Group of Companies where he became Head of Estates Department of London Sumatra Plantations where he was responsible for the operations on 50,000 ha of oil palm, rubber and cocoa across Indonesia. Between 1994 and 2006, Mr. Siggs consulted to large scale agribusinesses in Asia, Africa and Eastern Europe, specialising in performance improvement and privatisation, notable clients included Unilever plc, PT PP London Sumatra Indonesia tbk, New Britain Palm Oil plc and Univanich PCL. In 2006, Mr. Siggs joined the management team which established the biomass company Buchanan Renewable in Liberia; on the divestment of the company by Navina, Mr. Siggs moved to Feronia, where he established a strategy, identified acquisitions and established the management team. In 2009, Mr. Siggs led Feronia's successful acquisition of PHC.

Georgina Cotton, Chief Financial Officer

Georgina Cotton is a Chartered Accountant, and was the founder and management director of The Accounts Shop, an outsourcing and consultancy business which offered a support function in finance and administration, from 1999 to 2009. Between 1998 and 1999, she served as London Head of Finance at McKinsey, one of the leading international strategy companies.

William Dry, Chief Operating Officer, Palm Oil

William Dry is currently Chief Operating Officer, Palm Oil of Feronia. He has acted as an engineering consultant for several companies, including Greenstar Resources UK, Real Oil Mills, Actis UK, Goldtree (S.L.) Ltd., Unilever, Garlic UK Ltd., InfEnergy UK and Taylor Consultants UK. He received his degree in Chief Engineer Marine Engineering from South Shields Marine College and his Executive Management degree from London Business School in 1999.

Raymond Batanga, Chief Operating Officer, Agriculture

Raymond Batanga is currently Chief Operating Officer, Agriculture of Feronia. He has worked in various capacities at PHC since 1975, most recently as Operations Director from 1993 to 2006, where Mr. Batanga was responsible for the direction of the operations of four agro-industrial units covering 18,000 hectares of oil palm, 3,400 hectares of rubber, 1,000 hectares of cocoa and coffee, three palm oil mills and a rubber factory in the remote regions of the DRC. He received his diploma for the occupation of Agricultural Engineer in General Agronomy from the Universite National du Zaire/DR Congo and his post-graduate diploma in the Strategic Management of Change from Cranfield University in the United Kingdom.


The completion of the Proposed Transaction is subject to a number of conditions precedent which may be waived by either GTM or Feronia if such conditions are in their favour. The following is a summary of the significant conditions (in addition to the Release Conditions described above under "Feronia Private Placement"):

    1.  the parties entering into any necessary transaction documents which
        shall not be inconsistent with the terms and conditions set forth in
        the Definitive Agreement and reasonably acceptable to the other
        parties and their respective counsel;

    2.  receipt of the approval of the Exchange and all required approvals
        and consents to the Proposed Transaction and all related matters; and

    3.  no material adverse change shall have occurred in the business,
        results of operations, assets, liabilities, financial condition or
        affairs of Feronia or GTM, financial or otherwise, between the date
        of signing the Definitive Agreement and the completion of the
        Proposed Transaction.


The Proposed Transaction will not constitute a Non-Arm's Length Qualifying Transaction for the purposes of the Exchange policies. Accordingly, the Proposed Transaction will not be subject to the approval of the shareholders of GTM and therefore no meeting of the shareholders of GTM is required as a condition to the completion of the Proposed Transaction.

The Proposed Transaction will be an arm's length transaction and there are no conflicts of interest with respect to the Proposed Transaction of which GTM and Feronia are aware.


Other than Navina and the proposed directors and officers of the Resulting Issuer, to the knowledge of the directors and officers of GTM or Feronia, no person will become an insider of the Resulting Issuer as a result or upon completion of the Proposed Transaction.

Completion of the proposed transaction is subject to a number of conditions, including but not limited to Exchange acceptance and shareholder approval. 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 listing application to be prepared in connection with the proposed transaction, any information released or received with respect to the proposed transaction may not be accurate or complete and should not be relied upon.

The Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

Certain information in this press release may constitute forward-looking information. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Corporation assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Corporation. Additional information identifying risks and uncertainties is contained in the Corporation's filings with the Canadian securities regulators, which filings are available at www.sedar.com.


For further information: For further information: Daniel Friedman, Chief Executive Officer, G.T.M. Capital Corporation, t: 630.530.0766, e: dan@taxlien.com; Ravi Sood, Chairman (non-Executive), Feronia Inc., t: 416.362.6153, e: ravi.sood@feronia.com

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