Zenith Industries Corp.
TSX VENTURE : ZIN

November 24, 2008 15:04 ET

Zenith Industries Corp. Announces Planned Acquisition of Villagend Properties Ltd.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 24, 2008) - Zenith Industries Corp. ("Zenith" or the "Company") (TSX VENTURE:ZIN) has, subject to regulatory and shareholder approval, entered into an agreement (the "Agreement") with Villagend Properties Ltd. ("Villagend"), a private corporation incorporated under the laws of Northern Ireland, and Richard and Margaret Hogg (the "Villagend Shareholders") to purchase all of the issued and outstanding shares of Villagend from the Villagend Shareholders for a purchase price consisting of $680,000 cash, the issuance of 15,686,500 shares at a deemed price of $0.10 per share and the issuance of 2,000,000 share purchase warrants, each warrant exercisable into one share for a price of $0.10 per share for a period of five years. Zenith intends that the transaction with Villagend (the "Transaction") will constitute a Change of Business pursuant to TSX Venture Exchange (the "Exchange") Policies. Currently there are 17,790,000 Zenith shares outstanding and the proposed transaction will substantially increase the number of outstanding shares to 33,476,500 as well as create new control persons, Richard and Margaret Hogg.

Villagend

Villagend is a private holding company and the parent company of Limavady Gear Company Limited ("LGC"), a company specializing in gear boxes for wind power and marine applications and which is also pursuing the development of a small wind turbine.

LGC has been in operation since 1979 as a fully equipped engineering facility, specializing in the manufacture of replacement gears for the heavy industrial and marine industries. They are engaged in the refurbishment of gearboxes for major wind turbine installations throughout the UK and the European Union. LGC is the only Northern Irish company involved in this activity. In early 2008, LGC expanded its operational parameters by acquiring the exclusive intellectual property rights for "SKYROTA", a high efficiency Vertical Axis Wind Turbine (VAWT). The Skyrota VAWT operates at 5kW - 10kW, and is therefore classified as a small wind turbine. LGC's exclusive license agreement provides the exclusive rights to manufacture and market the product; as well as certain proprietary rights arriving from any improvements in relation to the registered patents, trademarks, registered design rights, and intellectual capital and trade secrets pertaining to the gearbox. This unique turbine demonstrates 30% efficiency in favourable wind conditions, and is designed specifically to be sold in the residential, rural and small commercial activity markets.

The turbine spins around the vertical axis, rather than the more traditional, horizontal axis. This vertical orientation is the best design for onshore winds and residential areas for several reasons: first of all, due to its vertical design, the turbine is quiet. There is no angular speed differential along the blade, between its hub and its tip: the entire blade moves at the same speed. This enables the turbine to be whisper quiet measuring only 1dB above background.

Upon completion of the acquisition, the resulting issuer will focus its efforts on the design, development and manufacture of this small wind turbine.

Terms of Agreement

Subject to approval by the Exchange at the time of closing, Zenith shall pay to each Villagend Shareholder $340,000, issue 7,843,250 common shares at a deemed price of $0.10 per share and 1,000,000 share purchase warrants, each share purchase warrant provides for the purchase of one common share at a price of $0.125 per share exercisable for a period of five years from closing. The Purchase Price is subject to a price adjustment clause if there is a change in the net worth of Villagend prior to the closing date.

The completion of the Transaction is subject to a number of conditions including:

(a) Villagend must maintain working capital of at least SterlingPounds Sterling 150,000 and long term debt including capital leases of no greater than SterlingPounds Sterling 1,500,000 prior to closing;

(b) Zenith shareholders approve the change of the Company's name from Zenith to Skyrota Wind Energy Corp, or some other name as agreed to by Villagend and Zenith;

(c) All third party consents, TSX-V and shareholder approvals and all other consents, approvals, orders and authorizations of any persons or governmental or regulatory authorities in Canada or elsewhere required in connection with the closing of the Transaction shall be obtained on or before the closing date.

A finder's fee of $144,932.50 will be payable to Spirit Industries Inc. upon completion of the acquisition.

Resulting Issuer

At the completion of the acquisition, Zenith shall change its name to Skyrota Wind Energy Corp. ("Skyrota Corp."). Skyrota Corp. will continue LGC's current businesses and expand the refurbishing gearboxes for major wind turbine installations in the U.K. and E.U. and will, under the tutelage of LGC, extend this service to the expanding North American Market. Skyrota Corp also intends to begin the manufacture and marketing of Skyrota wind turbines to both the home owner consumer market and the industrial and local authority market.

The initial directors and principals of Skyrota are expected to be:

Thomas Braun, Director, President and CEO - Mr. Braun holds a Bachelor of Arts from the University of Western Ontario (1988) and a Bachelor of Laws from the University of British Columbia (1991) and a Master of Law from the University of San Francisco (1997). Mr. Braun has been a Member of the State Bar of California since 1997 and a Member of the Law Society of British Columbia since 1999 and a partner with the law firm of Braun & Company since 1999. From August 2004 until June 2005, Mr. Braun was President and Director of Vorsatech Ventures Inc. (now Synutra International Inc.) an NASDAQ listed company, which manufactures dairy based nutritional products for infants and adults in China.

Brian Smith, Director, Chairman of the Board - Mr. Smith holds a Bachelor of Laws from the University of British Columbia (1960) and he has been a member of the Law Society of British Columbia since 1961. Mr. Smith also holds a Masters of Arts from Queen's University (1960). Mr. Smith served as a member of the Legislature of British Columbia from 1979 to 1989. Through the 1980's Mr. Smith was a representative of the Government of British Columbia in most of the First Minister's meetings involving constitutional and aboriginal issues and was Attorney General of British Columbia from 1983 to 1988. Mr. Smith completed a term as Chairman of Canadian National Railways, a position he held from 1989 to 1994. Mr. Smith currently practices law with the law firm of Gowling Lafleur Henderson LLP and has held the position of Part time Chief Negotiator for the Department of Indian Affairs since June 2001. Mr. Smith is also currently a director of a number of companies listed on the Toronto Stock Exchange and TSX Venture Exchange.

Richard Hogg, Director and Vice President European Operations - Richard Hogg has been involved in a number of businesses throughout his working career. They have varied between engineering and mining/construction. Mr. Hogg acquired LGC in 2005 and under his guidance as Managing Director the company has experienced extensive changes in both its management and physical structure, which have resulted in it becoming a more prominent force in the Gear Industry. Mr. Hogg also provides consulting advice to Reginald Hogg Holdings, a family business.

Ralph Braun, Director and CFO - Mr. Braun has been the CFO of J-Pacific Gold Inc., since April 2001. He has 15 years experience in business administration and information technology and his formal training includes an undergraduate degree from the University of British Columbia and a Master's degree in Business Administration from Western Washington University and he is a member of the Certified General Accountants Association of British Columbia. Mr. Braun's background includes assisting in the first mortgage backed securitizations, statistical cash flow portfolio analysis and other longer term debt financing.

Frederick Hogg, Director - Mr. Hogg is the Managing Director of Macrete Ireland, Ltd., which is a subsidiary of R. Hogg & Sons Ltd. As the Managing Director of Macrete, Mr. Hogg has extensive experience in the field of civil engineering. Under his supervision, the company has experience strong growth, and continues to expand across the UK.

Willie McCarter, Director - Mr. McCarter holds a Bachelor of Arts degree from Trinity College in Dublin Ireland and a Masters of Science Degree from the Massachusetts Institute of Technology. In 1971 he joined the family textile business in Ireland. He has served as the CEO of Fruit of the Loom in Ireland. In 1989 Mr. McCarter became a director of the International Fund for Ireland, an organization jointly owned by the Irish and British Governments and funded by the United States, the European Union, Canada, Australia and New Zealand. He became the chairman of the Fund in 1993 and oversaw its venture capital arm, Enterprise Equity. Since 1989 McCarter has served as a director of Cooley Distillery, the only independent Irish owned whiskey distillery in Ireland.

It is the intention of the Company that the stock remains halted until the completion of the Change of Business.

Wellington West Capital Inc., subject to completion of satisfactory due diligence, has agreed to act as sponsor to Zenith Industries Corp. 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.

On Behalf of the Board of Directors

Thomas Braun, Director and CEO

Completion of the transaction is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. 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 to be prepared in connection with the transaction, any information released or received with respect to the COB may not be accurate or complete and should not be relied upon. Trading in the securities of Zenith Industries Corp. should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Zenith Industries Corp.
    Thomas Braun
    CEO
    (604) 605-1635