Knowlton Capital signs letter of intent for reverse take-over with Leni Gas Cuba Limited

MONTREAL, April 29, 2016 /CNW Telbec/ - Knowlton Capital Inc. ("Knowlton") (TSXV: KWC.H) is pleased to announce that it has entered into a letter of intent dated April 28, 2016 with Leni Gas Cuba Limited ("LGC") for a reverse take-over of Knowlton by LGC (the "Reverse Take-over").  LGC was incorporated under the laws of the British Virgin Islands on March 3, 2015 as an investment vehicle for the purpose of making investments and/or acquisitions in Cuba.  LGC's corporate office is in London, England and it has been listed since November 2015 on the ISDX Growth Market under the stock symbol ISDX:CUBA.

It is anticipated that the Reverse Take-over will proceed by way of a share exchange and a "change of business" of Knowlton to an investment company, with the corporate name of the resulting public entity (the "Resulting Issuer") being changed to reflect the Reverse Take-over. The Reverse Take-over, if and when it proceeds, will result in the shareholders of LGC holding a majority of the outstanding common shares of the Resulting Issuer.

Specifically, the letter of intent contemplates that Knowlton will consolidate its 46,575,500 issued and outstanding common shares on the basis of 0.7825 common shares for every common share issued and outstanding (the "Knowlton Share Consolidation"), so that after the Knowlton Share Consolidation, 36,445,328 Knowlton shares will be issued and outstanding, and that after the Knowlton Share Consolidation, Knowlton will issue an aggregate of 197,600,000 common shares to the shareholders of LGC in exchange for their shares of LGC, on the basis of one Knowlton share for every 2.5 shares of LGC.  As a result, at the closing of the Reverse Take-over, the Resulting Issuer will own 100% of the shares of LGC, there will be 234,045,328 common shares of the Resulting Issuer issued and outstanding, of which the current shareholders of LGC will hold an aggregate of 197,600,000 shares, representing 84.43% of the outstanding shares, and the current shareholders of Knowlton will hold an aggregate of 36,445,328 shares, representing 15.57% of the outstanding shares.  The letter of intent also contemplates that the Board of Directors of the Resulting Issuer will be comprised of nominees of LGC and Knowlton and that the executive officers of LGC will become executive officers of the Resulting Issuer.

"We are very pleased to have signed a letter of intent with Leni Gas Cuba Limited, which has exciting projects in Cuba and elsewhere," said Mazen Haddad, Chairman, President and Chief Executive Officer of Knowlton. "In a short period of time, Lenigas Cuba has developed several projects that are beginning to bear fruit and we are glad to be participating in the further development and growth of Leni Gas Cuba. We believe the transaction with Leni Gas Cuba will be beneficial for the shareholders of Knowlton and we will do everything possible to complete the transaction as soon as possible" added Mr. Haddad.

Trading in the common shares of Knowlton is currently halted and is expected to remain halted pending preparation by Knowlton of a management information circular for a special meeting of shareholders to consider the Knowlton Share Consolidation and Reverse Take-over, at which time Knowlton may request a reinstatement of trading.

A comprehensive press release with further particulars relating to the Reverse Take-over and the Resulting Issuer will follow in accordance with the policies of the TSX Venture Exchange.

Completion of the Reverse Take-over is subject to a number of conditions including, but not limited to: completion of satisfactory due diligence; execution of a definitive agreement in respect of the Reverse Take-over; receipt of regulatory approvals; acceptance of the Knowlton Share Consolidation and Reverse Take-over by the TSX Venture Exchange; receipt of customary legal opinions; approval by the disinterested shareholders of Knowlton of the Knowlton Share Consolidation and Reverse Take-over; approval by the shareholders of LGC of the Reverse Take-over; and other actions necessary to complete the Reverse Take-over. The Reverse Take-over cannot close until the required shareholder approval is obtained. There can be no assurance that the Reverse Take-over will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in Knowlton's management information circular or filing statement to be prepared in connection with the Reverse Take-over, any information released or received with respect to the Reverse Take-over may not be accurate or complete and should not be relied upon. Trading in the securities of Knowlton should be considered highly speculative.

Knowlton also announces that it has terminated its previously-announced Amended and Restated Arrangement Agreement with Mogul Ventures Corp., a mining exploration company with properties in Mongolia.  The Amended and Restated Arrangement Agreement provided for a reverse take-over of Knowlton by Mogul Ventures. Knowlton will not proceed with the transaction. There is no penalty receivable or payable in connection with the termination.

Notice on forward-looking statements:

This release includes forward-looking statements regarding Knowlton, LGC and their respective businesses.  Such statements are based on the current expectations and views of future events of the management of each entity, and are based on assumptions and subject to risks and uncertainties.  Although the management of each entity believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect.  The forward-looking events and circumstances discussed in this release, including completion of the Knowlton Share Consolidation and Reverse Take-over, may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the companies, including risks regarding investments in Cuba, market conditions, economic factors, LGC's management's ability to manage and to operate the business, and the equity markets generally.  No forward-looking statement can be guaranteed.  Forward-looking statements speak only as of the date on which they are made and Knowlton undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

Knowlton's main activity is to identify and evaluate businesses or assets with the aim of completing a transaction to reactivate the company.

The TSX Venture Exchange has in no way passed upon the merits of the proposed Reverse Take-over and has neither approved nor disapproved the contents of this press release.  Neither the TSX Venture Exchange nor its Regulation Service 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 Knowlton Capital

For further information: Rafi Hazan, Chief Financial Officer, Tel: (514) 839-7234


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