B.C. Securities Commission Agrees to Hear Geosam Appeal of Cordy Private
Placement
Geosam remains troubled by the structure of the Private Placement, which overwhelmingly favoured the interests of certain insiders, and by the decision of Cordy's Board of Directors (the "Board") not to respond to Geosam's offer to subscribe for 50% of the Private Placement at a 12.5% premium to the proposed subscription price (the "Geosam Offer").
Cordy attempted to justify its actions in its press release of
Second, Cordy states that the issue price of the units (the "Units") sold under the Private Placement was greater than the volume weighted average price of Cordy's common shares (the "Common Shares") on the TSX Venture Exchange for the five and ten-day periods ending on
Third, Cordy argues that it could not have unilaterally accepted the Geosam Offer as shareholder approval would have been required. Geosam is of the view that a highly dilutive private placement, which has a high degree of insider participation should, as a matter of good governance, be subject to a shareholder vote. That said, Cordy could have asked Geosam to participate at a lower level. We note that Geosam could have participated at a level of 39% without requiring a shareholder vote under current TSX Venture rules. This would have resulted in additional proceeds to Cordy of approximately
Finally, we are disappointed by the Board's statement that it intends to use the proceeds of the Private Placement notwithstanding Geosam's request not to do so and the pending application before the Commission. On
Since we publicly voiced our concern regarding the Private Placement, we have heard from a number of other shareholders who, like us, are shocked by Cordy's treatment of minority shareholders. Geosam feels very strongly about the interests of minority shareholders and, accordingly, has challenged the propriety of the Private Placement. We look forward to our application being heard by the Commission.
Cautionary Information regarding forward-looking statements:
Statements about the intentions of Geosam and all other statements in this release other than historical facts constitute forward-looking statements. The statements are not a guarantee as to future performance and involve risks and uncertainties that are difficult to predict. The statements are based upon Geosam's current expectations and beliefs and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Geosam disclaims any obligation to update or revise information in this news release based on new information or otherwise, unless required by law.
For further information: Garen Mikirditsian, Investment Manager, Geosam Investments Limited, (416) 855-1928
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