Jemi Fibre (JFI-V) Feb 13, '14 has entered into: (i) a letter of intent with WoodEx Industries Ltd., dated Feb. 12, 2014, pursuant to which Jemi Fibre will acquire all of the issued and outstanding shares of WoodEx; and (ii) a letter of intent with Kootenay Wood Preservers Ltd. (KWP) and Prairie Holdings Inc., dated Feb. 12, 2014, pursuant to which Jemi Fibre will acquire all of the issued and outstanding shares of KWP and Prairie. The transactions contemplated by the WoodEx letter of intent and the KWP/Prairie letter of intent will collectively constitute a fundamental acquisition, as contemplated by the policies of the TSX Venture Exchange, and this news release has been prepared to fulfill certain disclosure requirements contained within those policies.Business of WoodEx
WoodEx operates a sawmill located in Edgewater, B.C. The sawmill is situated on approximately 50 acres of land and, on a nominal-board-foot basis, has capacity to produce approximately 110 million board feet per year. Its principal wood product is designed for the Japanese housing market.
Business of KWP
KWP is a postpeeling-and-treatment operation and plant, with its principal operations located in Cranbrook, B.C., on approximately 70 acres of land. It produces treated timber products for agricultural, highway and telephone pole use.
Business of Prairie
Prairie is a contract logger operating in the Kootenay region of British Columbia. It has a current run rate of approximately 250,000 cubic metres of logging per year.
Details of the transactions
Under the terms of the WoodEx letter of intent, Jemi Fibre will issue eight million common shares to the shareholders of WoodEx. Under the terms of the KWP/Prairie letter of intent, Jemi Fibre will issue four million common shares to the shareholders of KWP and Prairie.
Conditions to completion
Completion of the transactions is subject to a number of conditions, including but not limited to, entering into definitive agreements with WoodEx, KWP and Prairie, exchange acceptance, any other required regulatory and/or shareholder approval, and completion by Jemi Fibre of a concurrent financing as described as follows.
Non-arm's-length transactions
WoodEx, KWP and Prairie are not dealing at arm's length with Jemi Fibre in that Mike Jenks and Georgina Martin, directors and principal shareholders of Jemi Fibre, are directors of NMS Ventures Ltd., which owns 50 per cent of WoodEx and are directors of RGM Holdings Ltd., which owns 50 per cent of each of KWP and Prairie. Accordingly, each of the transactions will constitute a non-arm's-length transaction, as that term is defined in TSX-V Policy 2.4.
Concurrent financing and conversion of debt
In connection with the transactions, Jemi Fibre is undertaking a non-brokered private placement to sell up to 8,888,888 units at a price of 11.25 cents per unit for total proceeds of up to $1-million. Each unit consists of one common share of the company and one full share purchase warrant. Each warrant will entitle the purchaser to purchase an additional common share at a price of 11.25 cents per share for a period of five years following the closing of the offering. The net proceeds of the offering will be used to meet a condition of the closing of the transactions and for general working capital purposes. It is anticipated that insiders, as that term is defined under the policies of the exchange, will subscribe for units in the financing. The securities issued under the offering will be subject to a four-month hold period from the date of closing of the offering. In connection with a condition of the offering, the company intends to exchange up to $225,000 of debt owed to certain management of the company into common shares of the company at a price of 11.25 cents per share. The offering and the shares-for-debt exchange are subject to the approval of the exchange.
Posttransaction share capital
Upon completion of the transactions and the offering, the company anticipates that it will have 39,684,192 common shares issued and outstanding.
Finders' fees
There are no finders' fees payable in connection with the transactions or the offering.
Trading halted
In accordance with exchange policies, the company's common shares are currently halted from trading and will remain so until such time as the exchange determines otherwise, which, depending on the policies of the exchange, may not occur until the completion of the transaction. |
