VANCOUVER, May 8,
2014 /CNW/ - Run of River Power Inc. ("ROR" or
the "Company") (TSX-V:ROR) announces that it has entered
into a definitive arrangement agreement dated May 6, 2014 (the "Arrangement
Agreement") with Concord SCCP General Partner (I) Inc.
("Concord") and its
wholly-owned subsidiary ROR Acquisition Ltd. ("AcquireCo"),
0999130 B.C. Ltd. (the "REC Acquirer") and a wholly-owned
subsidiary of ROR, Rockford Energy Corporation
("REC"). The Arrangement Agreement replaces and
supersedes the letter of intent (the "Letter of Intent")
among the parties which was previously disclosed in ROR's news
release dated April 11,
2014.
The proposed arrangement (the
"Arrangement") is intended to effect: (i) an internal
reorganization of ROR whereby it will amalgamate with certain of
its wholly owned subsidiaries (the "First Amalgamation");
(ii) the sale by the shareholders of ROR (the "ROR
Shareholders") to AcquireCo of all of the issued and
outstanding shares (the "ROR Shares") of ROR (the "ROR
Disposition"); (iii) the amalgamation of AcquireCo with the
entity formed as a result of the First Amalgamation such that the
amalgamated company will become a wholly-owned subsidiary of
Concord; (iv) the repayment of
certain liabilities of ROR which are incurred on or before closing
of the Arrangement; and (v) the distribution of cash consideration
to the ROR Shareholders for their ROR Shares pursuant to the ROR
Disposition.
The transaction also includes the sale by ROR of
all of the issued and outstanding common shares in the capital of
REC (each, a "REC Share") to the REC Acquirer (the "REC
Sale") such that REC, which owns the Brandywine Creek Project,
will become a wholly-owned subsidiary of the REC Acquirer. The REC
Acquirer will purchase the REC Shares for aggregate consideration
of $8,040,000 (the "REC Purchase
Price"), comprised of $7,540,000
of outstanding debentures of ROR which will be transferred to ROR
and set-off against the REC Purchase Price and a cash payment of
$500,000 (the Arrangement and the REC
Sale are collectively referred to as the "Transaction").
The distribution of the cash consideration to the
ROR Shareholders is to occur on or about August 29, 2014. The amount of cash to be
distributed will be the balance remaining after payment of the
indebtedness and liabilities of ROR and its subsidiaries, other
than REC, at the effective date of the Arrangement, the total of
the cash on hand of ROR and its subsidiaries, other than REC, at
the effective date, the $1,250,000 to
be advanced by Concord as a
capital contribution to AcquireCo and $500,000 being the cash portion of the
consideration to be paid by the REC Acquirer for the REC
Shares.
For more information on the Arrangement and the
Arrangement Agreement, please refer to the full text of the
Arrangement Agreement, a copy of which will be filed by ROR on
SEDAR and will be available for viewing under its profiles on
www.sedar.com.
Concord and
AcquireCo are both private British
Columbia corporations that have an arm's length relationship
with ROR. The REC Acquirer is a private British Columbia company of which is
beneficially owned by certain holders of outstanding debentures and
convertible debentures of ROR. Peter
Zell, a director and significant shareholder of ROR, is a
director and shareholder of the REC Acquirer. Brett Robinson, a director and shareholder of
ROR, is a shareholder of the REC Acquirer and Real Gamache, a
significant shareholder of ROR, is a shareholder of the REC
Acquirer. Information in this news release concerning the
ownership and directors of the REC Acquirer has been provided to
ROR by the REC Acquirer.
Shareholders Meeting to Approve the
Transaction
A special meeting of the ROR Shareholders (the
"Meeting") will be held at 10:00 a.m.
(Pacific time) on May 30, 2014
at Suite 900 – 885 West Georgia Street, Vancouver, British Columbia. At the
Meeting, ROR Shareholders will be asked to consider and, if
determined appropriate, approve the Transaction.
To be approved, the Transaction requires approval
by a special majority (i.e. 2/3) of the ROR Shareholders, and
approval by a majority (i.e. 50% plus one) of the disinterested ROR
Shareholders in accordance with Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special
Transactions ("MI 61-101"). Disinterested
shareholder approval of the Transaction is needed as the REC Sale
is a "related party transaction" as defined in MI 61-101.
Peter Zell, a director and
significant shareholder of ROR, is a director and shareholder of
REC Acquirer, and Real Gamache, a significant shareholder of ROR,
is a shareholder of REC Acquirer. Mr. Zell and Mr. Gamache
are considered "interested parties" as defined in MI 61-101, as is
Terese Michone who is a significant shareholder of ROR and an
associate of Real Gamache. To the knowledge of management, the
interested ROR Shareholders who will have their ROR Shares excluded
from the disinterested shareholder approval will be Peter Zell, Real Gamache and Terese Michone who
collectively hold approximately 46.39% of the issued and
outstanding ROR Shares.
A Notice and Information Circular and related
meeting materials are expected to be provided to ROR Shareholders
in connection with the Meeting and will be filed on SEDAR under
ROR's profile at www.sedar.com.
Requisite Approvals
Closing of the Transaction is subject to, among
other things, receipt of the requisite approvals of the ROR
Shareholders, approval of the Court and approval of the TSXV.
Approval of a special majority of the ROR Shareholders and a
majority of the disinterested ROR Shareholders is required for the
Transaction to proceed.
Dissent Rights
Registered shareholders of ROR may exercise
rights of dissent in connection with the Transaction in accordance
with the Arrangement Agreement and Sections 237 to 247 of the
BCBCA. It is a condition to closing of the Transaction that
dissent rights shall not have been exercised with respect to more
than 5% of the issued and outstanding ROR Shares.
Formal Valuation and Fairness Opinion
In connection with the Transaction, the Company
has engaged a qualified independent valuator to provide a
comprehensive valuation and fairness opinion. The Company intends
to provide a copy of the valuation and fairness opinion to the ROR
Shareholders in connection with the Meeting and to file the same on
SEDAR along with the Meeting materials.
About Run of River Power Inc.
ROR develops renewable, sustainable energy
through its portfolio of clean energy projects. The Company helps
diversify BC's energy mix by providing a cleaner way to generate
power and increasing the security of BC's energy supply. ROR
operates an Eco Logo© certified hydroelectric power generation
station at Brandywine Creek, near Whistler, BC that provides green power for
about 4,000 homes.
Disclaimer Regarding Forward Looking Information
Certain information included in this press
release constitutes forward-looking information under applicable
securities legislation. Forward-looking information typically
contains statements with words such as "anticipate", "believe",
"expect", "plan", "intend", "estimate", "propose", "project" or
similar words suggesting future outcomes or statements regarding an
outlook, or statements that certain events or conditions "may"
occur. Forward-looking information in this press release
includes, but is not limited to, statements regarding the
expectations of management of ROR regarding: (i) the Transaction;
(ii) completion of the Transaction; (iii) entry into of the
agreements contemplated by the Arrangement Agreement; (iv) the
intended results of the Transaction; (v) the conditions to
completion of the Transaction; (vi) the calculation of and timing
for payment of the cash consideration to the ROR Shareholders;
(vii) the Meeting in connection with the Transaction; (viii) the
delivery of an information circular in connection with the Meeting
to consider the Transaction; and (ix) the proposed de-listing of
the ROR Shares and the proposed ceasing to be a reporting issuer of
ROR.
Although ROR believes that the expectations
reflected in the forward-looking information are reasonable, undue
reliance should not be placed on forward-looking information
because ROR can give no assurance that such expectations will prove
to be correct. Such forward-looking statements are subject to
risks and uncertainties that may cause actual results, performance
or developments to differ materially from those contained in the
statements including, without limitation, the risks that: (1) the
Transaction may not be completed for any reason whatsoever,
including that the requisite Shareholder, court and/or regulatory
approval of the Transaction may not be obtained or that AcquireCo
and/or the REC Acquirer may not have the necessary funds to make
their payments required by the Transaction; (2) the Transaction, if
completed, may not have the intended effect as set out in this news
release; (3) the aggregate amount of the ROR liabilities to be
deducted prior to the payment of the cash consideration to the ROR
Shareholders may be significant, and the resulting cash
consideration, if any, may be nominal; (4) the meeting of ROR
Shareholders to consider the Transaction may not occur; (5) the
information circular and other materials for the Meeting may not be
delivered to ROR Shareholders as expected; (6) the ROR Shares may
not be de-listed and ROR may not cease to be a reporting issuer
following closing for any reason whatsoever, and (7) such other
risks and uncertainties beyond the control of ROR.
Readers are cautioned that the foregoing list is
not exhaustive of all factors and assumptions which have been used.
The forward-looking information contained in this press release is
made as of the date hereof and ROR undertakes no obligation to
update publicly or revise any forward-looking information, whether
as a result of new information, future events or otherwise, unless
required by applicable securities laws. The forward looking
information contained in this press release is expressly qualified
by this cautionary statement.
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.
powering a cleaner tomorrow®
SOURCE Run of River Power Inc.