TORONTO, July 2, 2013 /CNW/ - Bendon International Ltd. ("Bendon")
announced today that it has filed a lawsuit in the Ontario Superior
Court of Justice naming Teranga Gold Corporation ("Teranga"), Oromin
Explorations Ltd. ("Oromin") and Oromin's wholly-owned subsidiary,
Sabodala Holding Limited ("Sabodala"), as defendants. The lawsuit
seeks declaratory, injunctive and monetary relief as a result of
Teranga's improper offer and take-over bid ("Takeover Bid") to acquire
all of the outstanding common shares of Oromin that it does not already
Teranga informally announced the Takeover Bid on June 4, 2013. Bendon's
lawsuit was filed in Ontario Superior Court of Justice on June 13,
2013, as Bendon International Ltd. v. Teranga Gold Corporation, et al.,
CV 13-482678. On June 19, 2013, Teranga mailed its offer and take-over
bid circular (collectively, the "Circular") and related documents to
the Oromin shareholders. Teranga's offer is open for acceptance until
July 30, 2013, unless extended or withdrawn.
Bendon is a 43.5% shareholder in the Oromin Joint Venture Group, Ltd.
("OJVG"). If Teranga's Takeover Bid is successful, Teranga would take
control of Oromin's 43.5% ownership interest in the OJVG through
Oromin's wholly-owned subsidiary Sabodala. OJVG was awarded an
exploration permit for the Golouma Gold Concession, which is comprised
of approximately 212.6 km² of land in the Tambacounda region of
south-eastern Senegal ("OJVG Gold Project"). Sabodala is the current
operator of the OJVG Gold Project.
Bendon is the original sponsor of the OJVG Gold Project, and invited
Oromin to participate. Provisions of the OJVG shareholders' agreement
prohibit the shareholders and their ultimate owners from directly or
indirectly transferring their interests in the OJVG Gold Project. The
shareholders' agreement is publicly available on www.SEDAR.com. Under the shareholders' agreement, a change of control in the
operator (Sabodala) triggers Bendon's right to remove the operator. If
the Takeover Bid is successful, and Teranga obtains control of Oromin,
Bendon will remove Sabodala as the operator of OJVG Gold Project.
Bendon's lawsuit asserts that the Takeover Bid is an improper attempt by
Teranga to gain a controlling interest in Oromin, and consequently,
control of Sabodala, the current operator. With control of Sabodala,
Teranga would try to gain effective control over the OJVG Gold Project,
but Bendon has already indicated that it will replace the operator and
prevent Teranga from overseeing any operations. Moreover, since all of
OJVG's major decisions require 80% shareholder approval, Teranga would
not be able to impose any major decisions at the OJVG level without
Bendon's express approval. Bendon does not intend to enable Teranga to
implement its proposed plan as outlined in its Circular.
Since December 2011, Teranga has been in negotiations with Bendon and
the other OJVG shareholders regarding the voluntary purchase of the
OJVG. Bendon believes that the Takeover Bid is an improper attempt by
Teranga to exert pressure on Bendon, and to accomplish through legal
maneuvers what it could not through good-faith negotiations.
The lawsuit alleges that the Takeover Bid will both put Sabodala in
breach of the OJVG shareholders' agreement and induce Sabodala to
breach its obligations under this agreement. The lawsuit further
alleges that by acquiring control of Sabodala, without restriction,
Teranga intends to enter into self-dealing transactions, to the sole
benefit of itself and to the detriment of Bendon and the other OJVG
A condition of Teranga's Takeover Bid is that Bendon's lawsuit be
dismissed or settled. Teranga's Circular admits that if it is unable
to resolve Bendon's lawsuit, the resulting litigation could make the
integration of Teranga and Oromin "more difficult than initially
anticipated" and may "materially diminish the potential benefits to
shareholders of the combined entity."
Teranga also acknowledges in the Circular that Bendon has the right to
remove Sabodala as the operator of the OJVG Gold Project pursuant to
the shareholders' agreement, and, as a result, the pursuit of any
potential mining economies "may be in jeopardy." Teranga's Takeover
Bid expressly assumes that there will be no change in the operator of
the OJVG and that there will be no material adverse change occurring in
Oromin. Teranga's Circular makes clear that there can be "no assurance
that there will be operational or other synergies realized by the
Bendon intends to take all steps necessary to stop Teranga's improper
attempt to gain control of the OJVG Gold Project. It will vigorously
litigate the lawsuit to protect its rights under the shareholders'
agreement. As stated above, if the Takeover Bid is successful, Bendon
intends to immediately remove Sabodala as the operator of OJVG Gold
Project, and does not intend to consent to Teranga's proposed plan of
SOURCE: Bendon International Ltd.