Ananda Capital Corp.
TSX VENTURE : ANN.P

July 06, 2010 16:21 ET

Ananda Capital Corp. Announces Up-Date to Private Placement in Conjunction With Its Qualifying Transaction

CALGARY, ALBERTA--(Marketwire - July 6, 2010) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.

Ananda Capital Corp. ("Ananda" or the "Corporation") (TSX VENTURE:ANN.P) is pleased to announce that further to a press release of the Corporation dated June 1, 2010 announcing that the Corporation entered into a letter of intent dated May 26, 2010 (the "Letter of Intent") with Colonial Coal Corporation ("CCC"), with respect to a proposed business combination of Ananda and CCC (the "Transaction") intended to constitute the "Qualifying Transaction" of Ananda, the brokered private placement (the "Private Placement") of subscription receipts ("Subscription Receipts") to be completed prior to the Transaction will now be conducted by the Corporation and not CCC as previously disclosed.

The parties have agreed that certain terms of the Private Placement have been amended as follows. Cormark Securities Inc. will lead a syndicate of agents (collectively, the "Agents"), to undertake the Private Placement of Subscription Receipts on a best efforts basis for up to $10,000,000 in gross proceeds, at a price of $0.77 per Subscription Receipt. Each Subscription Receipt will entitle the holder to acquire one common share ("Common Share") in the capital of the Corporation and one half of one Common Share purchase warrant ("Warrant") of the Corporation exercisable for 36 months from the date of issuance at an exercise price of $1.10 per Common Share, upon satisfaction of certain release conditions (the "Release Conditions"), including obtaining necessary regulatory approval, satisfying certain conditions to the completion of the Qualifying Transaction and obtaining a receipt for a final prospectus of the Corporation and any amendments thereto in respect of the distribution of the Common Shares and Warrants underlying the Subscription Receipts.

The Agents shall receive a cash commission equal to 5% of the gross proceeds of the Private Placement (the "Agency Fee") and shall receive that number of broker warrants (the "Broker Warrants") that is equal to 5% of the number of Subscription Receipts issued pursuant to the Private Placement. Each Broker Warrant shall entitle the holder to purchase one Common Share for a period of 36 months from the date of issuance at a price of $0.77 per Common Share.

The Subscription Receipts shall be issued pursuant to the terms of a subscription receipt indenture (the "Subscription Receipt Indenture") to be entered into between the Corporation, Cormark Securities Inc., as lead Agent, and an escrow agent (the "Escrow Agent"). The gross proceeds from the sale of Subscription Receipts shall be deposited with the Escrow Agent pursuant to the terms of the Subscription Receipt Indenture. The Subscription Receipt Indenture shall provide, among other things, that upon the satisfaction of all Release Conditions, the Agency Fee and the expenses of the Agents shall be paid to the Agents and the remainder of the gross proceeds and any interest thereon will be released from escrow and delivered to the Corporation. In the event that the Release Conditions are not satisfied within 120 days of the closing of the Private Placement, the gross proceeds shall be returned to the subscribers to the Private Placement.

Other Information and Updates

The parties continue to progress in the drafting and negotiation of definitive agreements pursuant to which the Transaction will be effected (the "Transaction Agreements"). The Corporation's shares are currently listed for trading on the TSX Venture Exchange (the "TSX-V"). In accordance with TSX-V policy, however, the Corporation's Common Shares are currently halted from trading and will remain halted until such time as determined by the TSX-V, which, depending on the policies of the TSX-V, may not occur until the completion of the Qualifying Transaction.

The Corporation will provide further details in respect of the Qualifying Transaction, in due course by way of press release. However, the Corporation will in due course make available to the TSX-V, all financial information as required by the TSX-V and will provide, in a press release to be disseminated at a later date, summary financial information derived from such statements.

Cautionary Statements

Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Corporation's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, this release contains forward-looking information relating to the intention of the parties to among other things enter into the Transaction Agreements and the completion of the Private Placement. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the Corporation. The material factors and assumptions include the parties to the Transaction Agreements being able to obtain the necessary director, shareholder and regulatory approvals; TSX-V policies not changing; completion of satisfactory due diligence; and no unforeseen circumstances with respect to the technical report that would cause delay while the parties rectified deficiencies. Risk factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking information include, among other things: conditions imposed by the TSX-V, the failure to obtain the required directors' and shareholders' approval to the amalgamation pursuant to the Transaction; changes in tax laws, general economic and business conditions; and changes in the regulatory regulation. The Corporation cautions the reader that the above list of risk factors is not exhaustive. The forward-looking information contained in this release is made as of the date hereof and the Corporation is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSX-V acceptance and if applicable pursuant to TSX-V 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 prospectus 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.

Neither the TSX-V, nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) has in any way passed upon the merits of the Transaction and neither of the foregoing entities has in any way approved or disapproved of the contents of this press release.

Contact Information

  • Ananda Capital Corp.
    A. Murray Sinclair
    President and Chief Executive Officer
    (604) 689-1428