Blandings Capital Limited
TSX VENTURE : BDC.P

January 18, 2010 16:11 ET

Blandings Capital Limited: Update on Proposed Qualifying Transaction and Annual General Meeting

CALGARY, ALBERTA--(Marketwire - Jan. 18, 2010) - Blandings Capital Limited ("Blandings" or the "Company") (TSX VENTURE:BDC.P) is pleased to provide this update with respect to its proposed acquisition (the "Acquisition") of all the outstanding shares of AMG Bioenergy Resources Holdings Ltd. ("AMG"), a British Virgin Islands company. AMG is active in the business of bio fuel feedstock and biodiesel in the People's Republic of China and other parts of Asia. It is anticipated that the Acquisition will constitute Blandings' Qualifying Transaction pursuant to Policy 2.4 – Capital Pool Companies of the TSX Venture Exchange (the "Exchange").

Further to its press release dated May 28, 2009, the Company has determined not to proceed with the proposed private placement of common shares which was previously intended to close concurrently with completion of the Acquisition.

The parties have now entered into an amended and restated share exchange agreement dated December 31, 2009 (the "Share Exchange Agreement") pursuant to which, among other administrative matters, the outside date for closing of the Acquisition has been extended to March 31, 2010.

Pursuant to the terms of the Acquisition, Blandings will acquire from the shareholders of AMG the 15,000,000 common shares of AMG currently issued and outstanding (each having a deemed value of $0.33), and Blandings will, subject to the approval of the Exchange, issue 25,000,000 Blandings common shares in exchange for each issued AMG common share. In addition, on closing of the Acquisition, (i) US$1,000,000 owing to certain AMG debenture holders will be converted into 5,985,555 Blandings common shares based on a conversion rate of $0.18 per common share and currency exchange rates in effect on October 31, 2009, and (ii) $370,980 owing to Lee Shoong Lim, the President and Chief Executive Officer of AMG, will be converted into 2,061,000 Blandings common shares based on a conversion rate of $0.18 per common share.

The common shares of Blandings to be issued in connection with the Acquisition will be subject to escrow restrictions as required under applicable securities legislation and may be subject to resale restrictions as required by the Exchange.

Following the completion of the Acquisition, Blandings will have 45,296,555common shares outstanding (on an undiluted basis). Blandings also currently has outstanding director and employee share options to acquire 812,500 common shares at an exercise price of $0.10 per share (the "Blandings Options"). It is expected that the holders of the Blandings Options will retain such options subsequent to the completion of the Acquisition in accordance with the current share option plan. 

On a fully diluted basis, the former shareholders of AMG and current shareholders of Blandings will own approximately 72.96% and 27.04% respectively of the issued, non-diluted Blandings common shares.

The completion of the Acquisition is subject to a number of conditions precedent including, but not limited to, the following:

  1. the receipt of all necessary regulatory, corporate and third party approvals, including the approval of the Exchange, and compliance with all applicable regulatory requirements and conditions in connection with the Acquisition;
  2. the confirmation of the representations and warranties of each party to the Share Exchange Agreement as set out in such agreement;
  3. the absence of any material adverse effect on the financial and operational condition or the assets of each of the parties to the Share Exchange Agreement;
  4. the delivery of standard completion documentation including, but not limited to, legal opinions legal counsels, officers' certificates and certificates of good standing; and
  5. other conditions precedent customary for a transaction such as the Acquisition.

The completion of the Acquisition is intended to occur on the tenth business day following the satisfaction or waiver of the conditions precedent or such other date as is mutually agreed to by the parties, but in any event no later than March 31, 2010. If the Acquisition is not completed on or before March 31, 2010, the terms of the Share Exchange Agreement will be terminated. Each of Blandings and AMG will be responsible for the payment of its own costs and expenses incurred in connection with the Acquisition.

It is the intention of Blandings and AMG to establish and maintain a Blandings board of directors that consists of directors with a combination of appropriate skill sets and is compliant with all regulatory and corporate governance requirements. The board of directors of Blandings currently consists of three members. Upon completion of the Acquisition, it is intended that Lee Shoong Lim will join the board of directors of Blandings. Two of the four members of the board will be independent directors. For biographies of the proposed directors of Blandings, please refer to Blanding's press release dated October 22, 2008.

Blandings continues to work towards completion of the Qualifying Transaction and filed a preliminary prospectus with the securities regulators in Alberta, British Columbia and Ontario on September 22, 2009. The Company is currently working through comments on the preliminary prospectus received from the Alberta Securities Commission on December 10, 2009 and hopes to be in a position to file a final prospectus shortly.

Annual General Meeting

Due to the time required and the timing of the processing of its preliminary prospectus, Blandings has decided to cancel its Annual General Meeting originally scheduled for December 21, 2009 and rescheduled for March 11, 2010.

The Company will publish an advanced notice of the new Annual General Meeting shortly and will issue a news release regarding the particulars of this meeting.

About Blandings

Blandings, a Capital Pool Company within the meaning of the policies of the Exchange, was incorporated in December 2006 and was listed on the Exchange in October 2007. Blandings does not have any operations and has no assets other than cash. Blandings' business is to identify and evaluate businesses and assets with a view to completing a Qualifying Transaction under the policies of the Exchange.

Trading in the common shares of Blandings has been halted on the Exchange since May 29, 2008 and will resume trading on the completion of the Qualifying Transaction.

The TSX Venture Exchange has granted a six month extension to Blandings for completion of its Qualifying Transaction. The new deadline for completion of the Qualifying Transaction is March 31, 2010.

FORWARD LOOKING INFORMATION

This news release contains forward-looking statements and information that are based on the beliefs of management and reflect the Company's current expectations. When used in this news release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology, are intended to identify forward-looking statements and information. Such statements and information reflect the current view of the Company with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned against attributing undue certainty to forward-looking statements. There are numerous factors that could cause the Company's actual results to differ materially from those indicated or implied by forward-looking statements and information.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE SECURITIES LEGISLATION.

Completion of the transaction 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 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.

Research Capital Corporation, subject to completion of satisfactory due diligence, has agreed to act, if required by the TSX Venture Exchange, 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.

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.

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