Augyva Mining Resources Inc.
TSX VENTURE : AUV

Augyva Mining Resources Inc.

February 23, 2017 12:33 ET

Augyva Announces Shareholder Approval of its Change of Business and Other Transactions

TORONTO, ONTARIO--(Marketwired - Feb. 23, 2017) - Augyva Mining Resources Inc. (TSX VENTURE:AUV) (Augyva or the Company) is pleased to announce that it has received shareholder approval of its previously announced proposed change of business from a "Mining Issuer" to an "Investment Issuer" (as such terms are defined in the policies of the TSX Venture Exchange (TSXV)) focused on the auto retail sector (the Proposed COB) at its special meeting of shareholders held today (the Meeting). As further described below, the Proposed COB and related matters were approved by over 90% of the votes cast at the Meeting by shareholders present in person or represented by proxy.

At the Meeting, Augyva's shareholders also approved certain other transactions (the Other Transactions), as described in the Company's management information circular dated January 26, 2017 (the COB Circular), including: (i) authorizing Augyva to enter into, through a limited partnership (the Partnership), an alliance agreement (the Alliance Agreement) with AA Finance Co LP (AAFC) and make financing available to AAFC or its affiliates, including, without limitation, the Initial Investment and the Obligated Financings (as such terms are defined in the COB Circular) (the Alliance Agreement Resolution); (iii) authorizing Augyva to enter into an administration agreement (the Administration Agreement) with the Partnership pursuant to which the Partnership, as administrator, will administer the general and administrative affairs of the Resulting Issuer (as such term is defined in the COB Circular) (the Administration Agreement Resolution); (iv) authorizing Augyva to make a capital contribution to the Partnership in the amount of $10.4 million (the Capital Contribution), which funds will be loaned by the Partnership to the Initial Borrower (as such term is defined in the COB Circular) and form part of the Initial Investment and bear interest at 10.5% per annum in accordance with the terms of the Initial Investment, and be used by AA Capital LP, an affiliate of AAFC, to subscribe for common shares of the Resulting Issuer (the Capital Contribution and Private Placement Resolution); (v) authorizing the creation of a new Control Person (as such term is defined in the polices of the TSXV) in connection with the private placement to AA Capital LP (the New Control Person Resolution); (vi) authorizing an amendment to the articles of Augyva in order to change its name to "Automotive Finco Corp.", or such other name as may be approved by the directors of Augyva (the Name Change Resolution); and (vii) authorizing an amendment to the articles of Augyva in order to consolidate its common shares by a ratio of up to 15:1 (the Share Consolidation), or such other ratio as may be accepted by the relevant regulatory authorities and approved by the directors of Augyva. Each of the foregoing items is described in greater detail in the Company's Notice of Special Meeting of Shareholders and COB Circular, filed on SEDAR at www.sedar.com.

The resolution approving Augyva's change of business received the affirmative vote of a majority of the votes cast by Company's shareholders present in person or represented by proxy at the Meeting, excluding votes attached to the common shares held by the current directors and officers of the Company in accordance with the policies of the TSXV (being 4,012,427 common shares or 4.06% of the issued and outstanding shares). The Alliance Agreement Resolution, the Administration Agreement Resolution, the Capital Contribution and Private Placement Resolution and the New Control Person Resolution each received the affirmative vote of a majority of the votes cast by the Company's shareholders present in person or represented by proxy at the Meeting, excluding votes attached to the common shares held by AAFC and Mr. Kuldeep Billan and his related parties (being 2,925,362 common shares or 2.96% of the issued and outstanding common shares). The Name Change Resolution and the Share Consolidation Resolution each received the affirmative vote of at least two-thirds of the votes cast by Company's shareholders present in person or represented by proxy at the Meeting.

The Company's Chairman of the Board of Directors, Farhad Abasov, notes that: "We are very grateful for our shareholders' support in this transformative transaction and are excited about our new path forward and the growth and ongoing opportunities that we anticipate it will bring to the Company and its shareholders."

It is anticipated that the Company will implement the Proposed COB and Other Transactions, including its initial debt financing with an affiliate of AAFC in the aggregate principal amount of $33,333,333 (the Initial Investment), as early as next week. The Initial Investment will bear interest at 10.5% per annum resulting in $3,500,000 of annual revenue to Augyva and have a 25 year term. Further details relating to the Initial Investment are disclosed in the COB Circular.

The Proposed COB transaction remains subject to and conditional upon, among other things, receipt of final approval of the TSXV.

Completion of the transactions noted above are subject to number of conditions, including but not limited to, TSXV final acceptance and, if applicable, disinterested shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transactions will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the COB Circular, any information released or received with respect to the transactions may not be accurate or complete and should not be relied upon. Trading in securities of Augyva should be considered highly speculative.

The TSXV has in no way passed upon the merits of the proposed transactions and has neither approved nor disapproved the contents of this news release.

Neither 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.

This news release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws, including statements regarding the future strategy of the Company and the approvals of matters put forth for approval at the Meeting. All statements, other than statements of historical fact, constitute forward-looking statements or forward-looking information. Such forward-looking information and statements are frequently identified by words such as "may", "will", "should", "anticipate", "plan", "expect", "believe", "estimate", "intend" and similar terminology, and reflect assumptions, estimates, opinions and analysis made by management in light of its experience, current conditions, expectations of future developments and other factors which it believes to be reasonable and relevant. In particular and without limitation, this news release contains forward-looking statements pertaining to the following: completion of the Proposed COB and Other Transactions; details concerning the Resulting Issuer that assume completion of the Proposed COB and Other Transactions; statements of intention with respect to the business and operations of the Resulting Issuer; the Resulting Issuer's growth strategy and opportunities.

Information contained in this news release may be considered to be a financial outlook for the purposes of applicable Canadian securities laws. Financial outlook contained in this news release is based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available, and to become available in the future. Prospective financial information contains forward-looking statements and is based on a number of material assumptions and factors set out above. Actual results may differ significantly from the information presented herein. Readers are cautioned that any such financial outlook contained or referenced herein should not be used for purposes other than those for which it is disclosed herein. The Company and its management believe that the prospective financial information has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results.

Forward-looking information and statements involve known and unknown risks and uncertainties that may cause actual results, performance and achievements to differ materially from those expressed or implied by the forward-looking information and statements and, accordingly, undue reliance should not be placed thereon. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause these differences include but are not limited to: the Company's failure to complete the Proposed COB and Other Transactions; the Company's failure to obtain requisite regulatory approvals in connection with the Proposed COB and Other Transactions; anticipated and unanticipated costs; the Company's ability to obtain necessary capital; the failure to complete the Initial Investment and other subsequent financings; and changes to general market and economic conditions. In addition, other risks and uncertainties that may cause actual results to differ materially from forward-looking information can be found in Augyva's disclosure documents on the SEDAR website at www.sedar.com. Augyva does not undertake to update any forward looking information except in accordance with applicable securities laws.

Not for distribution to United States newswire services or for dissemination in the United States. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the U.S. Securities Act or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Contact Information