SKANA Capital Corp.

SKANA Capital Corp.

September 04, 2009 09:30 ET

SKANA Enters Into a Definitive Agreement to Acquire Bus and Coach International

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 4, 2009) -


Further to its announcement dated May 4, 2009, SKANA Capital Corp. ("SKANA") (TSX VENTURE:SKN) is pleased to announce that it has entered into a definitive share purchase agreement (the "Agreement") with Bus and Coach International ("BCI"), a private Nevada company, dated as of July 31, 2009, pursuant to which SKANA has agreed to acquire all of the issued and outstanding common shares of BCI in exchange for common shares of SKANA (the "Acquisition").

Pursuant to the Acquisition, shareholders of BCI will receive, in the aggregate, 51,169,518 common shares of SKANA, representing, based on the current number of issued and outstanding common shares of SKANA, that number of common shares of SKANA that results in shareholders of BCI holding approximately 49.5% of SKANA after giving effect to the transaction. Completion of the Acquisition remains subject to a number of conditions precedent, including consent of shareholders and receipt of all required regulatory approvals, including, without limitation, the approval of the TSX Venture Exchange (the "TSX-V"). BCI and SKANA are arm's length parties.

On closing of the Acquisition, BCI will have debt of not more than US$21.5 million, of which US$12 million will be paid off upon closing of the Acquisition, with the remaining US$9.5 million remaining as an obligation of the resulting issuer. BCI shall continue to conduct its business as a wholly owned subsidiary of SKANA.

In connection with the Acquisition, SKANA has engaged Canaccord Capital Corporation ("Canaccord") as its agent in connection with a best efforts private placement (the "Offering") of subscription receipts of SKANA (the "Subscription Receipts") at a price of C$0.35 (the "Offer Price") per Subscription Receipt for aggregate gross proceeds of up to C$3,000,000. Canaccord shall have an option exercisable until two business days before Closing (as herein defined) to increase the size of the Offering to $4,000,000.

Each Subscription Receipt will entitle the holder thereof to acquire at the Escrow Release Time (as defined below), for no additional consideration, one Unit of SKANA. Each Unit will consist of one common share of SKANA and one common share purchase warrant of SKANA. Each warrant will entitle the holder thereof to subscribe for one additional common share (the "Warrant Shares") of SKANA at a price of C$0.75 for a period of 12 months from the Escrow Release Time, provided however, that if the closing price for trading of the common shares of SKANA exceeds C$1.00 per share for 20 consecutive trading days after expiration of the Hold Period, the warrants may be cancelled upon 30 days written notice to the warrant holders, at the option of SKANA. The common shares and Warrant Shares issued subsequent to this financing shall be subject to a four month holding period (the "Hold Period"). Closing of the Offering is expected to occur on September 24, 2009 (the "Closing Date"), or such earlier or later date as may be agreed upon. Canaccord shall be entitled to a cash commission of 7.5% of the gross proceeds raised pursuant to the Offering, payable at the Escrow Release Time. SKANA has also agreed to issue to Canaccord, on the Closing Date, warrants (the "Broker Warrants") entitling Canaccord to acquire that number of common shares of SKANA which is equal to 7.5% of the number of Subscription Receipts sold pursuant to Offering. Each Broker Warrant will have an exercise price of C$0.35 and will expire twelve (12) months from the date of issue of the Broker Warrants.

The gross proceeds of the Offering will be deposited in escrow on the Closing Date and will be released from escrow to SKANA (after deducting agent's commissions immediately prior to the closing of the Acquisition (the "Escrow Release Time") provided that all conditions precedent to the completion of the Acquisition shall have been satisfied or waived to the satisfaction of Canaccord, acting reasonably (the "Escrow Release Conditions") on or before the date (the "Escrow Deadline") that is the 90th day after the Closing Date.

In the event that the Escrow Release Conditions are not satisfied by the Escrow Deadline, the Subscription Receipts held will thereafter be automatically repurchased by SKANA at the Offer Price per Subscription Receipt plus accrued interest earned thereon.

In connection with the Acquisition, two current directors on SKANA's board will resign and be replaced by Phillip Oldridge and David Senior. Phillip Oldridge is BCI's Chief Executive Officer and President, Mr. Oldridge has over 20 years experience as an operator and previously ran one of the largest charter bus companies in Nevada. Mr. Senior is Chairman and Chief Executive Officer of Pronaia Capital Partners LTD, a private equity management firm which manages GY General Holdings LLC, a major shareholder of BCI.

The shares to be offered to the shareholders of BCI pursuant to the Agreement will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"). Such securities may not be offered or sold in the United States unless they are either registered under the Securities Act or there is an applicable exemption from registration under the Securities Act. The Acquisition is being structured as a transaction which is exempt from registration under the Securities Act.

Closing of the foregoing transactions remains subject to TSX-V approval. The TSX-V has deemed the Acquisition to be a "Change of Business" under the applicable TSX-V rules. The TSX-V has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

About Bus and Coach International

BCI is engaged in the design, manufacturing and sale of motor coaches and buses from its offices in Jennings, Kansas, Las Vegas, Nevada, Orlando, Florida and Southern California. BCI's flagship model, the BCI Falcon 45, was the first full-size motor coach to offer passenger seat belts and collision avoidance radar as standard equipment and meets European rollover standards. Its features and design incorporate BCI's goal of delivering innovative, cost-effective products that address the business challenges motor coach operators face.

BCI is controlled by Phillip Oldridge, a resident of Nevada. Mr. Oldridge is BCI's Chief Executive Officer and President, and holds 52% of the issued and outstanding common shares of BCI. GY, a Nevada limited liability company holds 40% of the issued and outstanding shares of BCI. GY is managed by Pronaia Capital Partners, LTD, a private equity management firm headquartered in Salt Lake City, Utah which is headed by David M. Senior, its Chairman and Chief Executive Officer.

About SKANA Capital Corp.

SKANA is listed on the TSX Venture Exchange as an Investment Issuer and is carrying on business as a merchant bank. It has previously made strategic investments in resource-based and other opportunities that it believes have significant potential for appreciation through its financial involvement and guidance. SKANA is seeking to diversify its investment portfolio beyond the resource sector and has expanded its investment policy to include companies in the industrial and technology sectors. SKANA's 100% investment in BCI will be its first transaction under its expanded investment policy.

Cautionary Note Regarding Forward-Looking Information This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the future financial or operating performance of BCI and SKANA and their projects, statements regarding synergies and financial impact of the proposed transaction, the terms and conditions of the transaction, the benefits of the proposed transaction, timing of future activities, expected production, requirements for additional capital, government regulation, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".

Forward-looking information is based on various assumptions and on the best estimates of BCI and SKANA, as the case may be, as of the date hereof, and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of BCI (and the company resulting from the successful completion of the proposed transaction) to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; delay or failure to receive board or regulatory approvals; timing and availability of external financing on acceptable terms; the business of BCI and SKANA not being integrated successfully or such integration proving more difficult, time consuming or costly than expected; not realizing on the potential benefits of the proposed transaction; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and delays in obtaining governmental approvals or required financing or in the completion of activities, and as well as those other risks identified in the documents filed under the profile of SKANA from time to time. Although BCI and SKANA attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Neither BCI nor SKANA undertake to update any forward-looking information, except in accordance with applicable securities laws.

Neither the 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.

Contact Information

  • Bus and Coach International
    Phillip Oldridge
    Chief Executive Officer and President
    (909) 801-0003
    SKANA Capital Corp.
    Greg Clarkes
    Chairman, Chief Executive Officer and President
    (604) 669-4899