TORONTO, Feb. 2, 2016 /CNW/ - Valencia Ventures Inc. (TSXV: VVI) ("Valencia" or the "Company") has terminated its amalgamation agreement with Chelsea Natural Gas Ltd. ("Chelsea CNG") as the proposed reverse take-over transaction was no longer able to be completed. In connection with the termination of the amalgamation agreement between Valencia and Chelsea CNG, Valencia has demanded the repayment of all amounts due under the $250,000 loan it provided to Chelsea LNG.
Fred Leigh, the President and Chief Executive Officer of Valencia, commented, "It is unfortunate Valencia and Chelsea CNG could not complete the proposed transaction as Chelsea CNG has an interesting business and appeared to have substantial growth opportunities. However, one of the consequences of the upheaval in oil and gas markets is a current lack of available funding for alternative energy projects and Chelsea CNG has been a victim of the current difficult financing situation."
Valencia provided Chelsea CNG with a $250,000 loan (the "Loan") for working capital purposes pending completion of the proposed transaction. The Loan is secured against the Chelsea CNG Class "A" voting shares owned by the founding shareholders of Chelsea CNG, which comprise over 90% of the Class "A" voting shares of Chelsea CNG. On January 29, 2016, Valencia provided to Chelsea CNG written notice of default under the Loan.
Valencia is a Canadian resource company with common shares that trade on the NEX Board of the TSX Venture Exchange under the symbol VVI.
Forward - Looking Information
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to repayment of the debenture; consequences of terminating the amalgamation agreement and the transaction; the future business and financing of Valencia and timing for lifting the halt on Valencia shares. Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; regulatory risks; financing risks; impacts of volatility and overall falling commodity prices; and other risks of the natural resources industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
NEITHER THE 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 Valencia Ventures Inc.
Image with caption: "Valencia Ventures Inc. (CNW Group/Valencia Ventures Inc.)". Image available at: http://photos.newswire.ca/images/download/20160202_C2614_PHOTO_EN_611211.jpg
For further information: Fred Leigh, 65 Queen Street West, Suite 815, Toronto, Ontario, M5H 2M5, President and CEO