BTU Capital Corp Announces Qualifying Transaction Completes Letters of Intent for Acquisition of the Shares of Snowcap Energy Inc.
Vancouver, British Columbia, Canada (Marketwire – June 28, 2011) - BTU Capital Corp. (TSX VENTURE EXCHANGE: BTU.P)
Snowcap Energy Acquisition -- BTU Capital Corp. ("BTU" or "the Company") is pleased to announce it has entered into a non-binding Letter of Intent with Snowcap Energy Inc. ("SEI"), pursuant to which the Company will acquire (the "SEI Acquisition") all of SEI's issued and outstanding shares. SEI is a Calgary-based junior oil & gas company with an interest in the Wabamun tight-oil play of Alberta, and is negotiating potential project interests in Argentina and Brazil.
The structure of the SEI Acquisition will be determined in a tax-effective manner for both the Company and SEI, and will be governed by a definitive purchase agreement to be entered at a future date. The SEI Acquisition, if completed, will constitute the Company's "Qualifying Transaction" under TSX Venture Exchange (the "TSXV" or the “Exchange”) Policy 2.4. The SEI Acquisition is an arm's length transaction and management anticipates that shareholder approval will not be required. Additional details regarding the SEI Acquisition will be announced as they become available.
Material Terms of SEI Acquisition
The material terms of the SEI Acquisition are set out in a Letter of Intent signed June 24, 2011 by both the Company and SEI (the “LOI”). The material terms of the LOI can be summarized as follows:
1. Subject to certain terms and conditions set out in the LOI, including the issuance of all approvals required by the Exchange, the Company will consolidate its outstanding shares on a 3.5-to-1 basis, and then on a consolidated basis acquire all of the issued and outstanding shares of SEI, in consideration of which the Company will issue 6 million shares from its treasury. The exact number of shares which are to be issued by the Company may be revised prior to completion of the transaction, which will be disclosed by the Company in subsequent news releases.
2. The obligations of the Company and SEI to complete the SEI Acquisition are subject to a number of conditions, including:
(a) the Company being satisfied with its due diligence review of SEI and its properties (principally being its oil and gas rights in Alberta, discussed below), on or before the closing of the transaction (the “Due Diligence Period”);
(b) the Company raising $600,000 by way of a private placement at $0.15 per share on a consolidated basis (see below);
(c) the Company entering into a sponsorship agreement if required by the Exchange;
| (d) execution by all parties of a definitive share purchase agreement (the | |
| “Agreement”, discussed below); | |
| (e) receipt of the approval of the shareholders of the Company; and | |
| (f) acceptance of the Qualifying Transaction and any related matters by the | |
| Exchange. | |
| During the Due Diligence Period, the Company shall have the exclusive right to acquire | |
| SEI's outstanding securities, and the Company has agreed that it will not enter into any | |
| other Agreement in Principal (as defined in TSXV Policy 2.4) with any other party. If the | |
| Company is satisfied with its due diligence review of SEI, the LOI contemplates that at | |
| the conclusion of the Due Diligence Period, the Company and SEI shall proceed with | |
| preparation of a definitive share purchase agreement and related documents necessary to | |
| give effect to the SEI Acquisition in accordance with the following terms: | |
| (a) the Company shall complete the SEI Acquisition in consideration for the | |
| issuance of 6 million common shares of the Company on a consolidated | |
| basis to SEI’s shareholders, or their respective nominees (the “Share | |
| Consideration”), which shall be issued effective as of closing of the | |
| Qualifying Transaction. The Share Consideration shall be issued subject to | |
| Exchange approval; | |
| (b) if required by the Exchange, the Company shall retain an Exchange | |
| member brokerage firm to act as sponsor for the Qualifying Transaction in | |
| accordance with the rules and policies of the Exchange, on terms to be | |
| negotiated; | |
| (c) the Company shall retain the services of Chapman Petroleum Engineering | |
| to complete an oil and gas reserves report with respect to SEI's Alberta oil | |
| and gas interests, which will comply with N.I. 51-101; | |
| (d) SEI shall provide a comprehensive list of the Assets supported by a legal | |
| opinion that all Assets are owned or will be owned by SEI prior to the | |
| closing of the Qualifying Transaction; | |
| (e) SEI shall provide all financial statements required under Exchange | |
| policies; and | |
| (f) The Share Consideration to be issued under the Qualifying Transaction, as | |
| well as shares held by “principals” of the “Resulting Issuer” (as such terms | |
| are defined in Exchange policies) shall be subject to resale restrictions and | |
| escrow requirements under applicable securities laws and Exchange | |
| requirements, and, if necessary in order to complete the Qualifying |
| Transaction, may also include a performance-based escrow release | |
| formula. | |
| Sponsorship | |
| Sponsorship of a Qualifying Transaction of a capital pool company is required by the | |
| TSX-V unless exempt in accordance with Exchange policies. | |
| Name Change | |
| Subject to all necessary approvals, the Company intends to change its name to "Snowcap | |
| Energy Corp." or a similar name, effective upon the closing of the Qualifying | |
| Transaction. | |
| Proposed Private Placement | |
| In order to finance the recommended work programs, costs associated with the | |
| Qualifying Transaction and for general working capital of the resulting issuer, the | |
| Company intends to complete a private placement to raise aggregate gross proceeds of | |
| $600,000. It is currently anticipated that the financing will be undertaken, subject to | |
| applicable TSX-V policies, by way of a non-brokered private placement of up to 4 | |
| million units consisting of one share at $0.15 plus one share-purchase warrant exercisable | |
| at $0.25 per share for a period of two-years. | |
| Resulting Issuer's Capital Structure | |
| BTU currently has approximately 8.3 million common shares issued and outstanding; | |
| upon completion of the proposed 3.5-to-1 consolidation, the Company will have | |
| approximately 2.37 million shares outstanding. It is intended that no additional common | |
| shares will be allocated or reserved for issuance on the exercise of options and broker | |
| warrants except as described in BTU's most recent interim financial statements for the | |
| period ending April 30, 2011, or as may be contemplated under the financings forming | |
| part of BTU's qualifying transaction. | |
| Finder's fees may be payable on closing of the SEI Acquisition and the financings | |
| described above in accordance with the policies of the TSX-V. The shares issuable to the | |
| vendor in connection with the SEI Acquisition and the securities issued pursuant to the | |
| proposed private placement will be subject to escrow requirements and hold periods as | |
| required by applicable securities laws. Upon completion of the SEI Acquisition, the | |
| Company expects to be designated as a Tier 2 natural resource issuer on the TSX-V. At | |
| closing of the Qualifying Transaction, the Company will grant additional options to the | |
| directors, officers, employees and consultants of the resulting issuer. | |
| Significant Closing Conditions |
Closing and final acceptance of the transaction is subject to the satisfaction of certain conditions, including the completion of satisfactory due diligence, the negotiation and execution of definitive agreements, completion of the private placement, approval of shareholders to the proposed name change (if required), approval of the TSXV and any other regulatory bodies and the maintenance of the Company's listing on the TSXV.
Directors, Officers and other Insiders
On completion of the Acquisition, the directors, senior officers, insiders and senior advisors of the resulting issuer are anticipated to include a majority of directors nominated by SEI. All will be subject to Exchange approval.
About BTU
The Company is designated as a Capital Pool Company by the TSXV. It has not commenced commercial operations and has no assets other than cash. Since the completion of its initial public offering, the Company's sole business has been to identify and evaluate businesses or assets with a view to completing a Qualifying Transaction (as defined in the Exchange Policy 2.4). Any proposed Qualifying Transaction must be approved by the TSXV and, in the case of a non-arm's length Qualifying Transaction, must also receive majority approval of the minority shareholders. Until the completion of a Qualifying Transaction, BTU will not carry on any business other than the identification and evaluation of businesses or assets with a view to completing a proposed Qualifying Transaction. For further information regarding BTU, the offering, and BTU's management team, see the Prospectus and BTU's disclosure documents on SEDAR at www.sedar.com.
On Behalf of the Board of Directors of BTU Capital Corp.
Walter Brenner, President & CEO
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States.
The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Completion of the SEI Acquisition is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required Exchange and shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the 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.
Forward Looking Statement
Statements contained in this news release that are not historical facts constitute "forward-looking statements" or "forward-looking information" within the meaning of applicable securities laws and are based on expectations, estimates and projections as of the date of this release. Forward-looking statements include, without limitation, possible events, statements with respect to possible events, the future price of gold and silver, the realization of mineral resource estimates and success of exploration activities. The words "is expected" or "estimates" or variations of such words and phrases or statements that certain actions, events or results "may" or "could" occur and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. All of the forward-looking statements made in this release are qualified by these cautionary statements and those made in our other filings with the securities regulators in Canada. These factors are not intended to represent a complete list of the factors that could affect the Company. Although the Company believes that the expectations in the forward-looking statements are reasonable, actual results may vary, and future results, levels of activity, performance or achievements cannot be guaranteed.
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.
For more information, please contact
BTU Capital Corp.
Suite 125A - 1030 Denman Street Vancouver, BC V6G 2M6 Telephone: 604 818-2617 Fax: 604 648-9013