Announces Plan of Arrangement With Emergo Energy Inc.
posted on Feb 05, 2009 01:19PM
Exploration, development and production of Oil and Natural Gas in Western Canada.
|February 5, 2009|
|Ivory Energy Inc. Announces Plan of Arrangement With Emergo Energy Inc.|
|CALGARY, ALBERTA--(Marketwire - Feb. 5, 2009) -
(NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA)
Ivory Energy Inc. (TSX VENTURE:IV) ("Ivory") announces that it has entered into a definitive arrangement agreement with Emergo Energy Inc. ("Emergo"), whereby Emergo will acquire all of the outstanding securities of Ivory. The total transaction value of the Arrangement is approximately $21.0 million (including the assumption of debt, working capital and transaction costs). Emergo is an arm's length, private oil and gas company.
The transaction will be effected by means of a court approved plan of arrangement in accordance with the Business Corporations Act (Alberta) (the "Arrangement"). Under the terms of the Arrangement, holders of common shares of Ivory (the "Ivory Shares") will receive $0.0378 in cash for each Ivory Share; holders of 9.5% convertible secured subordinated debentures of Ivory (the "Ivory Debentures") will receive $226.92 in cash for each $1,000 in principal amount of Ivory Debentures outstanding; and holders of options and warrants to acquire Ivory Shares will receive nil consideration and such options and warrants will be cancelled. The Arrangement is subject to the approval by the securityholders of Ivory, as well as court and regulatory approvals.
The Board of Directors of Ivory, including a Committee of Independent Directors have considered the Arrangement and have unanimously determined it is in the best interests of Ivory and its shareholders given the challenging conditions of the severely constrained equity and debt markets, very low commodity prices and Ivory's position with respect to its lenders.
The Board of Directors of Ivory has retained Haywood Securities Inc. to provide a fairness opinion with respect to the Arrangement.
An information circular detailing the Arrangement is anticipated to be mailed to securityholders of Ivory by no later than February 27, 2009 for a securityholder meeting to approve the Arrangement, anticipated to be held no later than March 31, 2009. Details of the information circular mailing date and the securityholder meeting date will be announced in due course. The Arrangement will require: (a) affirmative approval by holders of not less than 66 2/3% of the Ivory Shares, options and warrants, voting together as a single class, that vote in person or by proxy at such meeting, and (b) affirmative approval by holders of not less than 66 2/3% of the aggregate principal amount of the Ivory Debentures, voting together as a single class, that vote in person or by proxy at such meeting.
Under defined circumstances, Ivory has agreed to a non-completion fee payable to Emergo in the amount of $800,000.
Subject to the satisfaction of customary closing conditions and the receipt of applicable regulatory and other approvals, it is anticipated that the closing of the Arrangement will occur shortly after the meeting of securityholders of Ivory.
Ivory continues to produce oil from its Saskatchewan heavy oil properties and natural gas and natural gas liquids from its Obed, Alberta gas property. For the month of January 2009, Ivory estimates its sales by volume to be approximately 1,020 BOE per day. Routine field operations, including minor workovers, will continue to the extent reasonably possible.