Terrenex Acquisition Corporation
TSX VENTURE : TXA

Terrenex Acquisition Corporation

February 02, 2007 00:15 ET

Terrenex Proposes Corporate Reorganization

CALGARY, ALBERTA--(CCNMatthews - Feb. 2, 2007) - Terrenex Acquisition Corporation ("Terrenex" or the "Company") (TSX VENTURE:TXA) announced that, subject to regulatory and shareholder approval, it intends to complete a corporate reorganization by way of a court approved plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement").

Pursuant to the Arrangement, Terrenex's existing assets and liabilities, excluding the contingent tax liability to the Tax Authorities described below and $750,000 in cash or liquid securities, will be conveyed, pursuant to the reorganization, to a new entity, "Terrenex Ltd.". Terrenex shareholders will exchange their shares, on a share-for-share basis, for shares in Terrenex Ltd.

The Arrangement is to facilitate settlement of a contingent liability arising from reassessments of the Company's 1995 corporate reorganization by Canada Revenue Agency and Alberta Corporate Tax Administration (collectively, the "Tax Authorities"). The reassessments would increase the Company's federal and provincial taxes payable by approximately $15.29 million and $7.92 million, respectively; including interest accrued to December 31, 2006.

Terrenex has been advised that the Tax Authorities will not object to the Arrangement provided that: (i) Terrenex pays, in the aggregate, $6.0 million to the Tax Authorities; and (ii) Terrenex withdraws its Notice of Appeal and discontinues all appeals against the Tax Authorities in connection with the reassessments. Terrenex will receive $5.25 million of the $6.0 million payment to the Tax Authorities from the insurers for its former professional advisors.

The Board of Terrenex has approved the Arrangement and recommends shareholders vote to approve the proposed plan of arrangement. Terrenex intends to hold a special meeting of its shareholders in late March 2007 to consider and, if appropriate, approve the Arrangement.

THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OR ADEQUACY OF THIS RELEASE.

Contact Information

  • Terrenex Acquisition Corporation
    Michael Binnion
    President
    (403) 777-1185
    (403) 777-1578 (FAX)
    Email: terrenex@cia.com