Fronsac Capital Inc.

Fronsac Capital Inc.

August 05, 2008 19:41 ET

Fronsac Capital Announces the Closing of a Private Placement and Completion of Its Qualifying Transaction

MONTREAL, QUEBEC--(Marketwire - Aug. 5, 2008) - Fronsac Capital inc. ("Fronsac") (TSX VENTURE:GAZ.P), a capital pool company whose securities are traded on the TSX Venture Exchange (the "Exchange"), is pleased to announce completion of its qualifying transaction (the "Qualifying Transaction") in accordance with the terms of the Exchange's Policy 2.4 - Capital Pool Companies.

As a condition of the Qualifying Transaction and following shareholder approval, Fronsac completed a private placement (the "Placement") of 4,000,000 Common Shares at a per share issue price of $0.25 (the "Shares") for gross proceeds of $1,000,000. The Placement was made with investors pursuant to National Instrument 45-106 Prospectus and Registration Exemptions. Michel Cholette, Michel Lassonde, Jacques Beaudry, Richard Chicoine and Martin Grimard, all Fronsac directors, purchased in the aggregate 1,533,334 Common Shares pursuant to the terms of the Placement.

As per its press release of May 6, 2008, Fronsac acquired all the outstanding units of La Societe en commandite BCCGL Richelieu St-Hilaire ("BCCGL"). BCCGL owns all the issued and outstanding shares of 9167-9688 Quebec inc., which owns an immovable alongside Highway 20 outside Mont St-Hilaire that is the subject of leases relating to the operation of a McDonald's restaurant, a Beau-Soir convenience store and an Ultramar service station.

The Unitholders, each of whom holds 20%, are Sofinat Ltd., a company owned by Michel Lassonde (a director of Fronsac) and members of his immediate family, Investissements Grimards inc., a company owned by Martin Grimard (a director of Fronsac), Jacques Beaudry (a director of Fronsac), Gestion Cholette Lefebvre senc, a partnership held in part by Michel Cholette (a director of Fronsac) and Gestion Immobiliere MSC inc., a company owned by Richard Chicoine (a director of Fronsac). Each received 800,000 Common Shares of Fronsac for a total of 4,000,000 Common Shares of Fronsac. Those shares, as well as the shares purchased by the above-mentioned directors under the Placement, are subject to an escrow agreement, as required by the rules of the Exchange, and they will be released over a 36-month period.

Fronsac's now intends to focus on purchasing sites that border on major highways or thoroughfares and that will have one or more fast food restaurants integrated in a complex that also has a gas station and, ideally, a convenience store.

"We are very pleased to have completed our Qualifying Transaction and we foresee continuing to make such acquisitions with a view to building a profitable portfolio for our shareholders", commented Michel Cholette, President of Fronsac's Board of Directors.

At closing of the Qualifying Transaction, Fronsac granted a total of 235,000 stock options at a per share price of $0.25 to its directors and executive offices, the whole in accordance with the terms of the Fronsac stock option plan. The options expiry date is August 5, 2013.

As a result of concluding the Qualifying Transaction and concurrent Placement, Fronsac has satisfied Tier 2 requirements for companies in the real estate sector.

As reported in its Management Proxy Circular dated July 4, 2008, Fronsac has created the following Board committees: an Audit Committee composed of Michel Cholette, Richard Laferriere and Jacques Beaudry and a Corporate Governance and Appointments Committee composed of Richard Laferriere, Michel Lassonde and Richard Chicoine.

The Exchange has not in any way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. The Exchange does not accept responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Fronsac Capital Inc.
    Michel Lassonde
    President and CEO
    (450) 973-4144