TORONTO, Oct. 6 /CNW/ - PCI-1 Capital Corp. (TSX-V: ICC.P) ("PCI-1") announced today that it has entered into a letter agreement (the "Letter Agreement") with Delavaco Energy Inc. ("Delavaco") and Alange Energy Corp. ("Alange") relating to the transaction agreement between Delavaco and Alange dated September 30, 2009 (the "Transaction Agreement"). Under the Transaction Agreement, Alange has agreed to acquire all of the issued and outstanding common shares of Delavaco in exchange for common shares of Alange pursuant to a three-cornered amalgamation (the "Amalgamation"). On August 13, 2009, PCI-1 announced the execution of an amended and restated qualifying transaction agreement (the "QT Agreement") with Delavaco which provided for the amalgamation of Delavaco with a wholly-owned subsidiary of PCI-1 and for holders of common shares of Delavaco to receive 0.6438 of one PCI-1 common share for every Delavaco common share held (the "Qualifying Transaction").
Pursuant the Letter Agreement, PCI has agreed to consent to the Amalgamation on certain conditions, including that Delavaco issues to PCI immediately prior to the completion of the Amalgamation an aggregate of 4,410,589 common shares of Delavaco ("Delavaco Shares") consisting of (i) 4,073,831 Delavaco Shares in respect of PCI's existing issued capital and (ii) 336,758 Delavaco Shares in respect of PCI's existing convertible securities. Under the terms of the Amalgamation, the Delavaco Shares issued to PCI will be exchanged for 3,825,744 common shares of Alange, which common shares of Alange will not be subject to any escrow or regulatory hold period. In addition, Delavaco has agreed to reimburse PCI for certain of its expenses incurred in respect of the Qualifying Transaction.
The completion of the Amalgamation is subject to satisfaction of a number of customary conditions precedent, including but not limited to, receipt of all necessary regulatory approvals and the approval of the shareholders of Delavaco. There can be no assurance that the Amalgamation will be completed as proposed or at all.
The Letter Agreement also confirms that the QT Agreement has not been terminated and that, in the event the Amalgamation has not been completed on or before October 23, 2009, Delavaco and PCI will thereafter use commercially reasonable efforts to complete the Qualifying Transaction prior to November 30, 2009. In this regard, PCI and Delavaco have agreed to amend the QT Agreement to deal with the proposed Amalgamation, including by extending the deadline for the completion of the Qualifying Transaction from October 31, 2009 to November 30, 2009.
About PCI-1 Capital Corp.
PCI-1 is a capital pool company within the meaning of the policies of the TSX Venture Exchange. PCI-1 has not commenced operations and has no assets other than cash.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the
proposed transaction and has neither approved nor disapproved the
contents of this press release.
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.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release contains forward-looking information which is not comprised of historical facts. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to, PCI's objectives, goals or future plans, and the completion of the Amalgamation or the Qualifying Transaction. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, Delavaco shareholders not approving the Amalgamation, conditions precedent to the closing of either transaction not being satisfied, and TSXV final approval not being obtained. Although PCI believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. PCI disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.
SOURCE PCI-1 CAPITAL CORP.
For further information: For further information: Michael Bester, President and Chief Executive Officer, PCI-1 Capital Corp., Tel: (416) 619-3160, Fax: (416) 214-5954