TORONTO, Sept. 29 /CNW/ - At the request of the TSX Venture Exchange, Oilexco Incorporated ("Oilexco" or "the Company") (TSX-V: OIL) provides an update about recent activities in the Company.
In a July 16, 2009 news release, Oilexco announced that the Company had received a court order (dated July 16, 2009) requiring Oilexco and its wholly owned subsidiary, Oilexco Technical Services Inc., to liquidate all of their assets and propose a Plan of Compromise and Arrangement ("the Plan") to creditors that will have the effect of distributing these proceeds to creditors. This news release also stated that the liquidation process will be overseen by the court appointed Monitor, Ernst & Young Inc.
The July 16, 2009 court order required that the Company mail meeting materials for a creditors meeting to approve the Plan by August 25, 2009. To this end, a Notice of Meeting was sent to creditors on August 25, 2009 advising that the Plan would be tabled for approval at a meeting on September 15, 2009. At the meeting, the Monitor provided the following details to creditors:
- The Company's remaining assets consisted of estimated cash of
$15.5 million and an apartment in London, UK, whose impending sale
should result in approximately $3.5 million, for a total of
$19 million less the estimated expenses of liquidation.
- The total debt claimed by creditors is approximately $1.2 billion,
however these claims are still being reviewed.
- Based on the filed claims, the distribution proceeds equal
approximately $0.015 on the dollar to creditors and no assets for the
On September 15, 2009 the creditors approved the Plan. Then, on September 16, 2009, the court granted its approval to the Plan. In order to implement the Plan and give effect to the Court order, on September 18, 2009, the Company filed Articles of Reorganization under the Business Corporations Act (Alberta) that changed the name of the Company from Oilexco Incorporated to ScotOil Petroleum Limited, and consolidated the issued and outstanding shares on the basis of one post-consolidation common share for every ten pre-consolidation common shares. The name change and share consolidation require TSX Venture Exchange approval. Application for such approval has not been made to date, but will be made at such time as the Company has funds available to it and applies for a return to trading on the TSX Venture Exchange.
Creditor claims are to be satisfied in full from the liquidation proceeds. Timing for the completion of the distribution to creditors and ultimate conclusion of the CCAA proceeding will depend on the final resolution of creditors' claims, some of which are subject to ongoing mitigation. However, as the distribution pool has been set and the claims bar date has passed, the Company is free to pursue new business endeavours and financing without need for either creditor or court approval, and without exposing possible new financing or business opportunities to claims from the creditors.
As a result of creditors approving the Plan, on September 16, 2009, the Company terminated the agreement with its Transfer Agent, Computershare Trust Company of Canada, given that the Company no longer had funds to pay for such services.
The Board of Directors currently consists of Arthur Millholland, William H. Smith, John Cowan and W. Fraser Grant. The Company's Officers consist of Arthur Millholland (President & Chief Executive Officer), William H. Smith (Executive Vice President & General Counsel), and Aleksandra Owad (Chief Financial Officer).
At this time, the Board has not developed a strategy or a business plan for ScotOil. ScotOil has approximately a $400 million capital loss carry forward and a $49 million operating loss carry forward. ScotOil will attempt to identify a new business opportunity and secure funding for it. It is anticipated that any new business endeavours will be focused in Canada to take advantage of the favourable tax position of the Company, however at this time the Company is not able to anticipate how long it may take to identify such opportunities and financing, nor if any such opportunities or financing will in fact become available to the Company.
As the Company does not have a Transfer Agent, the TSX Venture Exchange has advised that the trading halt presently on the Company's shares will be changed to a suspension. The Company is aware that its shares currently trade on the Pink Sheets under the symbol "OILXF", however, as this listing was not authorized by the Board of Directors, the Company is uncertain how long trading may continue as the Company has no plans to actively seek to continue to trade on the "Pink Sheets".
Forward Looking Statements
All statements included in this press release that address activities, events or developments that ScotOil expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements involve substantial known and/or unknown risks and uncertainties, some of which may be beyond ScotOil control, including: the uncertainty of court proceedings under the Companies' Creditors Arrangement Act, the impact of general economic conditions in the areas in which ScotOil operates, civil unrest, industry conditions, changes in laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. As such, caution should be exercised by the reader wherever forward looking statements are made.
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.
On Behalf of the Board of Directors:
Mr. Arthur Millholland, President and CEO
SOURCE OILEXCO INCORPORATED
For further information: For further information: Rob Elgie, Investor Relations Consultant, Phone: (403) 718-1805