Ninepoint Energy Income Fund press release
Gemini Energy Corp. and NRG Investments Inc. - Joint News Release
TSX - Toronto Stock Exchange ยท Canada
VANCOUVER, May 22 /CNW/ - Gemini Energy Corp. (TSX:GNI) and NRG Investments Inc. (CNQ:NRGI) announce that they have signed a term sheet whereby NRG Investments proposes to acquire all of the issued and outstanding securities of Gemini Energy by way of a Plan of Arrangement under the Business Corporations Act (British Columbia).
The term sheet contemplates that Gemini shareholders that are not U.S. persons will have the election of receiving either $4.00 cash or one common share of NRG for each Gemini share acquired. Shares of Gemini Energy common stock held by U.S. persons will be acquired for $4.00 per share. On the closing date, all outstanding warrants and options of Gemini Energy will be cancelled in exchange for payment by NRG Investments to the holder of cash in an amount equal to the difference between the exercise price and $4.00.
Gemini Energy has four secured convertible debentures that are currently outstanding. Two of these debentures are held by John Hislop and two are held by Brad Windt. Each of the four secured convertible debentures entitles the holder to repayment of $5,000,000 principal plus accrued interest. Two of these convertible debentures, one held by Mr. Hislop and the other held by Mr. Windt, are dated March 1, 2004 and are convertible into units at a conversion price of $2.50, with each unit to consist of one share of Gemini Energy common stock and one share purchase warrant. Each share purchase warrant would entitle the holder to purchase one additional share of Gemini Energy common stock for $3.25. Each of these March 1, 2004 convertible debentures will be converted and the resulting conversion shares and share purchase warrants will be sold to NRG Investments at closing. The purchase price for the shares and warrants, in the total sum of $19,000,000, will be loaned back to NRG Investments at closing and in respect thereof NRG Investments will issue two new convertible debentures, one to each of Mr. Hislop and Mr. Windt. Each new convertible debenture would be for a principal amount of $9,500,000. These two convertible debentures will be for a ten year term, will earn interest at a rate of 10% during the first five years and 15% during the second five years and will be convertible into units during the first five years at a conversion price of $4.875 per unit. Each unit would consist of one common share and one share purchase warrant. Each share purchase warrant would entitle the holder to purchase one additional common share of NRG Investments for $4.875 until the fifth anniversary of the closing date, at which date these share purchase warrants will expire.
The third and fourth currently outstanding Gemini Energy secured convertible debentures, one held by each of Messrs. Hislop and Windt, are dated July 30, 2004 and are convertible into units at a conversion price of $4.00. These July 30, 2004 secured convertible debentures will be assumed by NRG Investments without alteration, except that they will be convertible into units of NRG post-closing, rather than Gemini.
At the closing, Mr. Hislop will deliver an additional 2,500,000 shares of Gemini common stock to NRG Investments for cash and will loan back to NRG Investments the proceeds thereof in the sum of $10,000,000. NRG Investments will issue in respect thereof a convertible debenture in the original principal amount of $10,000,000. Also at the closing, Mr. Windt will deliver 2,075,043 shares of Gemini common stock for cash and will loan back to NRG Investments the proceeds thereof in the sum of $8,300,172. Mr. Windt will also loan an additional $1,699,828 to NRG Investments and, in respect of both amounts, will be issued a convertible debenture in the original principal amount of $10,000,000. These two convertible debentures will have a ten year term, will earn interest at a rate of 10% during the first five years and 15% during the second five years and will be convertible into units during the first five years at a conversion price of $4.875 per unit. Each unit would consist of one common share and one share purchase warrant of NRG. Each share purchase warrant would entitle the holder to purchase one additional common share of NRG Investments for $4.875 until the fifth anniversary of the closing date, at which date these share purchase warrants will expire.
The term sheet provides that as a condition to the closing of the plan of arrangement, Gemini Energy will sell 12,000,000 shares of the common stock of Exxel Energy Corp. to Q Investments Ltd., also a party to the term sheet, at a price per Exxel common share equal to 60% of the average closing price (last sale of the day) for the ten-trading-day period ending Friday, May 11, 2007. Part of the purchase price will be paid by Q Investments surrendering to Gemini Energy for cancellation 2,373,900 shares of Gemini common stock currently held by Q Investments at a deemed price of $4.00 per share of Gemini common stock. The balance of the purchase price will be in the form of a promissory note in the amount of the balance due. This promissory note will be for a one year term and will earn interest at the rate of 15% per annum. The note will be partially paid following closing by Q Investments surrendering a $1,500,000 promissory note that it currently holds in NRG. Q Investments' acquisition of the Exxel shares is subject to the approval of the TSX Venture Exchange.
The plan of arrangement is a 'business combination' for Gemini Energy and a 'related party transaction' for NRG Investments as contemplated by Ontario Securities Commission Rule 61-501, and is subject to valuation requirements, extensive disclosure requirements, security-holder approvals (both by special resolution and by a majority of the minority) and regulatory approval, including that of the TSX and the CNQ. In addition, the plan of arrangement is subject to the negotiation, settlement and execution by Gemini Energy and NRG Investments of a definitive arrangement agreement, the entry of a court order approving the arrangement and other conditions enumerated in the term sheet. The sale of Exxel shares is subject to the negotiation, settlement and execution by Gemini Energy and Q Investments Ltd. of a definitive purchase agreement and other conditions enumerated in the term sheet. Gemini Energy's sale of the Exxel shares is also a 'related party transaction' for Gemini under Rule 61-501. The term sheet will be filed within the next few days on the website maintained by the Canadian Securities Administrators at www.sedar.com.