MONTREAL, Oct. 20 /CNW Telbec/ - Pebercan Inc. (the "Company"), (NEX: PBC.H) today unveiled its results for the period ended September 30, 2009. All amounts in this press release are in Canadian dollars.
On January 14, 2009, the Company, through its wholly-owned subsidiary, Peberco Limited ("Peberco"), signed an agreement with Cubapetreola SA ("Cupet") for the premature termination of the oil production sharing agreement and the assignment of accounts receivable (the "Agreement"). Under this Agreement, Peberco agreed to the premature termination of the hydrocarbon production-sharing agreement initially concluded on August 21, 1993. Peberco's rights consequently reverted to Cupet.
On February 20, 2009, the Company announced that it was ceasing its commercial activities and was planning to liquidate Pebercan, after which it would distribute to its common shareholders the net cash resulting from its share of the payment received on February 9, 2009 by its subsidiary Peberco, excluding provisions and accounts payable.
On May 26, 2009, the Company held a special meeting of shareholders, previously authorized by the Court and announced on April 17, 2009, during which a plan of arrangement was approved by over 99% of the votes cast by holders of common shares and options present in person or represented by proxy.
On July 6, 2009, the Court approved Pebercan's plan of arrangement pursuant to the Canada Business Corporations Act and authorized Pebercan to proceed with the liquidation.
As part of the liquidation process, a claims procedure was set up to identify and respond to claims filed against the Company. As well, appropriate steps will be taken to obtain discharge from fiscal authorities, if applicable.
On September 28, 2009, the Company's Board of Directors approved an out-of-court settlement for the lawsuit filed in 2008 by two shareholders, one a former senior executive of the Company and the other, a former Pebercan consultant. Under the settlement, the plaintiffs agree to drop the case against the Company and its subsidiary, its principal shareholder and the Company's directors, and to waive the right to any other recourse whatsoever against them in exchange for payment of approximately $800,000.
On April 1, 2009, the Company changed its functional and reporting currency from the U.S. dollar to the Canadian dollar since it is now more representative of the Company's non-commercial operations.
- Activities and results for the nine-month period ended September 30,
On February 9, 2009, the Company sold its oil assets to Cupet.
Furthermore, according to the Agreement signed with the latter, production for
the period from January 1 to February 9 was not billed.
However, the Company incurred production costs until its oil facilities
were transferred to Cupet. These costs amounted to $3.9 million and include
the Company's share of operating expenses incurred by Sherritt.
- Financial position
NET ASSETS IN LIQUIDATION
The net assets in liquidation presented in the Company's financial
statements as at September 30, 2009 amounted to $93.9 million and consist
mainly of cash and cash equivalents.
Cash and cash equivalents
Cash includes those investments with initial terms of no more than three
months as at September 30, 2009. Investments, mostly consisting of short-term
investments in euros and Canadian dollars, can quickly be converted to cash,
i.e. within 48 hours. Interest charged up to and including the period of
liquidation was not accounted for as at September 30, 2009. Interest income
will be accounted for as it is collected.
Interest in subsidiaries
Pebermat Limited and Peberco Limited, two subsidiaries wholly owned by Pebercan Inc., were amalgamated on March 25, 2009. The new merged entity continues to exist under the corporate name Peberco Limited.
The Company holds 100% of the shares of Peberco Limited, i.e. all of Peberco's issued and outstanding shares. The estimated net liquidation value of its interest in Peberco Limited is established at nil as at September 30, 2009. As at April 30, 2009, following approval by Peberco's directors, the latter proceeded to reduce its paid-up share capital by $44.5 million, bringing the value of the 100 outstanding shares down to US$1 each. The directors also approved a dividend payout of $54.3 million to Pebercan.
Following these distributions, the estimated net liquidation value of the interest in Peberco Limited was established at nil.
Accounts payable and accrued liabilities
Accounts payable and accrued liabilities stood at $243,000 as at September
30, 2009 and essentially consist of severance pay.
Future expenses to incur up to and including liquidation
Future expenses to incur up to and including liquidation are estimated at
$1,455,000 as at September 30, 2009.
These estimates take into account liability insurance for officers and
executives for a certain period of time after the Company's dissolution.
- Outlook and contingencies
On February 20, 2009, the Company announced that it was ceasing its commercial activities. The Company will distribute to its shareholders, the net cash stemming from the payment received from the Cuban authorities by its subsidiary Peberco.
On July 6, 2009, the Company obtained a Court order approving the claims process and appointing a controller to start the process.
As part of the liquidation process, a claims procedure was set up to identify and respond to claims filed against the Company. As well, appropriate steps are underway to obtain discharge from the tax authorities.
The Company is currently being audited by the Canada Revenue Agency with regard to its Canadian operations in fiscal years 2001, 2002 and 2003. As at September 30, 2009, the Company was still awaiting the outcome of this audit.
Pebercan's interim consolidated financial statements and management discussion and analysis for the period ending September 30, 2009 are available on our Web site at www.pebercan.com, as well as on SEDAR at www.sedar.com.
Pebercan Inc. was involved in the exploration, development and exploitation of oil reserves in the Republic of Cuba. Its entire production was sold to the Cuban government. Pebercan began winding up its operations after it received final Court approval for its plan of arrangement, previously approved by over 99% of the votes cast by holders of common shares and options present in person or represented by proxy at the special meeting of shareholders held on May 26, 2009. The Company is listed on the NEX under the symbol PBC.H.
Legal Notice - Forward-Looking Statements
Forward-looking statements contained in this press release involve known and unknown risks, uncertainties or other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We consider that these forward-looking statements are reasonable given the assumptions on which they are based and which the Board of Directors of the Company has reviewed and ascertained as being well founded. Pebercan disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Important additional information identifying risks and uncertainties is contained in the Company's most recent annual and interim reports and forms filed with the applicable Canadian securities regulatory authorities.
SOURCE PEBERCAN INC.
For further information: For further information: PEBERCAN Inc.: Christophe Ranger, email@example.com, (514) 286-5200; Fax: (514) 286-5177