Chairman Capital Corp. announces execution of formal agreement with Longreach
Oil and Gas Ventures Limited
SYMBOL - CMN.H
TORONTO, July 20 /CNW/ - Chairman Capital Corp. ("Chairman" or the "Company") is pleased to announce that the TSX Venture Exchange (the "Exchange") has granted the Company conditional approval for its Qualifying Transaction with Longreach Oil and Gas Ventures Limited ("Longreach") announced in the Company's news releases dated November 11, 2009. Pursuant to applicable securities law, the Company has filed a Filing Statement on SEDAR for its proposed Qualifying Transaction along with a National Instrument 51-101 compliant Technical Report for the oil and gas licenses held by Longreach.
Chairman Capital Corp. ("Chairman") is also pleased to announce that it has entered into a formal agreement dated July 19, 2010 (the "Longreach Acquisition Agreement") with Longreach regarding the Qualifying Transaction whereby Chairman has agreed, subject to the satisfaction of the conditions set out in the Longreach Acquisition Agreement, to:
1. Consolidate its shares on the basis of five pre-consolidation
Chairman shares for one post consolidation Chairman share (the
"Consolidation");
2. Change the name of Chairman to be "Longreach Oil and Gas Limited"
(the "Name Change");
3. Continue Chairman to Jersey, Channel Islands (the "Continuance"); and
4. Acquire all of the issued and outstanding shares of Longreach by
issuing Chairman post consolidation shares in exchange for all of the
issued Longreach securities (the "Longreach Acquisition").
The Qualifying Transaction is anticipated to close on or about August 4, 2010.
In this press release, Chairman, following completion of the Qualifying Transaction is referred to as the "Resulting Issuer".
The shareholders of Chairman approved the Consolidation, the Name Change and the Continuance at a meeting of Chairman shareholders' held on January 22, 2010. The Longreach Acquisition is not subject to shareholder approval.
The common shares of Chairman were listed on the Exchange under the symbol "CMN.P" from May 9, 2007 until February 26, 2010, at which time the listing of the Chairman shares was transferred to the NEX under the symbol "CMN.H". The price per common shares of Chairman on November 9, 2009, the last day the Chairman shares were not subject to a trading suspension, was $0.25.
Longreach
Longreach is a private oil and gas exploration company incorporated in Jersey, Channel Islands with interests in four exploration licenses in southern onshore and offshore Morocco. None of the securities of Longreach have traded on any stock exchange.
Bryan Benitz, Longreach's Chairman and CEO stated, "Today's announcement is another milestone in Longreach's development. We believe that Longreach will be well placed to capture significant opportunities that exist for oil exploration and production in North Africa. To date, Longreach has developed an exploration portfolio in Morocco, representing approximately 15% of the country's total licence area. With a proven management team supported by an experienced board of directors with a track record of creating value through the drill bit, combined with strong and supportive local relationships, we are excited about the future of Longreach."
Concurrent Offering
In connection with the Qualifying Transaction, Longreach has engaged Deacon and Company Capital Markets Inc., to complete on a best efforts basis a private placement (the "Offering") of units of Longreach ("Longreach Units") at a price of $3.00 per Longreach Unit. Each Longreach Unit is comprised of one common shares of Longreach and one-half of one Longreach common share purchase warrant. It is anticipated that approximately 1,166,667 Longreach Units will be subscribed under the Offering for gross proceeds of approximately $3,500,000. The net proceeds of the Offering will be used to cover work program commitments on the licenses, to cover the expenses of the Offering and the Qualifying Transaction and to cover a twelve month general and administrative budget. Completion of the Offering is a condition precedent to the Qualifying Transaction.
Longreach Acquisition
For every one common share of Longreach taken up and paid for by Chairman pursuant to the Longreach Acquisition, Chairman will issue 3.224 post consolidation Resulting Issuer shares from treasury, at a deemed price of $1.00 (post-consolidation or $0.20 pre-consolidation) per share. In addition, pursuant to the terms of the Longreach Acquisition Agreement upon completion of the Longreach Acquisition all Longreach warrants will be exchanged into equivalent Resulting Issuer warrants. Each Resulting Issuer warrant will be exercisable for a Resulting Issuer share at an exercise price of $1.50 per share for the period that is the longer of: (i) 12 months from the date Chairman is listed on the Exchange; and (ii) 24 months from the Offering closing date.
A portion of the Resulting Issuer shares to be issued by the Resulting Issuer under the Qualifying Transaction will be placed in escrow and will be released on terms to be set by the Exchange and agreed to by the Longreach principals.
Capitalization
As of the date of this press release, Chairman has 1,000,000 common shares and 166,667 options issued and outstanding. Longreach has 3,000,000 common shares and no options issued and outstanding as of the date of this release. The following list sets out those shareholders who will hold more than 10% of the common shares of the Resulting Issuer upon completion of the Qualifying Transaction.
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Resulting Issuer Shareholders Holding Over 10%
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Shareholder Name Jurisdiction of Residence
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Bryan Benitz (held in the names of
Aramis Services Ltd. and SBS Nominees Ltd.
as nominees) United Kingdom
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The Gascoigne Trust (certain shares will be
held in the name of SBS Nominees Ltd.
as nominee) United Kingdom
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Sponsorship
Chairman and Longreach have engaged Union Securities Ltd. ("Union") to act as a Sponsor and to provide a report to the Exchange with respect to the Qualifying Transaction, as contemplated by the policies of the Exchange. Union has agreed to act as Sponsor, subject to satisfactory due diligence, and Chairman has agreed (i) to pay the Sponsor a cash fee of $35,000, (ii) to issue to the Sponsor 50,000 Resulting Issuer shares and 50,000 Resulting Issuer warrants, and (iii) to pay the reasonable legal fees and expenses of the Sponsor.
Directors and Officers
Upon Completion of the Qualifying Transaction, Longreach will be a wholly-owned subsidiary of the Resulting Issuer. The board of directors of the Resulting Issuer is expected to be comprised of the following persons: Bryan Benitz (Chief Executive Officer, Chairman and Director), Andrew Benitz (Chief Operating Officer, Secretary and Director), Yogeshwar Sharma (Director), Dr. Mahmoud Zizi (Director) and D. Campbell Deacon (Director). The Resulting Issuer will be appointing Michal Holub as interim Chief Financial Officer.
Financial Information
The following table sets out certain financial information for Chairman and for Longreach (as at March 31, 2010):
Chairman Longreach
(Three-Months Ended (Three-Months Ended
March 31, 2010)(1) March 31, 2010)(1)
$ (pnds stlg)
---------------------------------------------
Total revenue.............. NIL NIL
Net earnings (loss)........ (12,600) (63,436)
Current assets............. 51,914 1,344,413
Total assets............... 51,914 1,344,413
Current liabilities........ 92,832 797,041
Total liabilities.......... 92,832 797,041
(1) The information has been extracted from the unaudited financial
statements as at March 31, 2010.
Statements in this press release regarding Longreach's and Chairman's businesses which are not historical facts are "forward-looking statements" that involve risks and uncertainties, such as the terms and completion of the proposed transaction. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.
Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the transaction, any information released or received with respect to this transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed on the merits of this proposed transaction and has neither approved nor disapproved the contents of this press release.
Union Securities Ltd., subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.
ON BEHALF OF THE BOARD
CHAIRMAN CAPITAL CORP.
"Jonathan Aune"
Jonathan Aune, CEO
Additional information on Chairman Capital Corp. can be found at www.sedar.com.
For further information: Jonathan Aune, CEO, Chairman Capital Corp., (416) 361-1448
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