Denovo Capital Corp.

July 08, 2011 16:36 ET

Denovo Shareholders Elect New Director and Approve Name Change and Share Consolidation

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 8, 2011) - Denovo Capital Corp. ("Denovo" or the "Corporation") is pleased to announce that at a special meeting of shareholders of the Corporation held June 30, 2011 (the "Special Meeting"), the Corporation's shareholders approved a 0.65 (new) for 1.0 (old) share consolidation (the "Consolidation") and a change of name of the Corporation to Horn Petroleum Corporation, or such other name as the directors of the Corporation determine is appropriate (the "Name Change"). Both the Consolidation and the Name Change will be effected concurrently with the completion of the proposed acquisition (the "Acquisition") of all of the issued and outstanding shares of Canmex Holdings (Bermuda) I Ltd. ("Canmex I"). Canmex I is a wholly-owned subsidiary of Africa Oil Corp. ("Africa Oil") and is the indirect holder of Africa Oil's participating interests in the Dharoor Valley and Nugaal Valley Production Sharing Agreements (the "Puntland PSAs") in Puntland, Somalia. Also at the Special Meeting, the Corporation's shareholders approved an increase in the number of directors of the Corporation from three to four, re-elected Messrs. A. Murray Sinclair, Michael Winn and Michael Atkinson as returning directors, and elected Keith Hill as a new director of the Corporation. Mr. Hill is currently the President and Chief Executive Officer of Africa Oil.

The Acquisition

The Acquisition will constitute the Corporation's Qualifying Transaction pursuant to the policies of the TSX Venture Exchange (the "Exchange"). As disclosed in the Corporation's May 12, 2011 news release, Denovo will acquire Canmex I in consideration of 27,777,778 post-Consolidation common shares (the "Common Shares") of Denovo. As a result of Africa Oil's recent acquisition of Lion Energy Corp. ("Lion") and the subsequent transfer of Lion's 15% interest in the Puntland PSAs to Canmex I, Canmex I's interest in the Puntland PSAs has increased from 45% to 60%.

The parties are finalizing the terms of a definitive agreement in respect of the Acquisition. The definitive agreement will provide for conditions precedent that are standard for a transaction of this nature, including receipt, by both Africa Oil and Denovo, as required, of all regulatory, partner and third party approvals including Exchange approval.

Private Placement

Denovo has commenced the placement of subscription receipts (the "Subscription Receipts") of Denovo, also as disclosed in the May 12, 2011 news release. The private placement will be for a minimum of 26,666,666 Subscription Receipts and a maximum of 41,111,111 Subscription Receipts, which are being sold at a post-consolidation price of CAD$0.90 per Subscription Receipt for gross proceeds of a minimum of $24,000,000 and a maximum of $37,000,000. Each Subscription Receipt will be exercised, upon completion of the Acquisition, into a unit of Denovo, comprised of one Common Share and one share purchase warrant (a "Denovo Warrant"). Each Denovo Warrant will entitle the holder to acquire an additional Common Share for $1.50 for two years, subject to accelerated exercise provisions if the Denovo's Common Shares trade at greater than $2.00 for 30 consecutive trading days. Denovo will also make commercially reasonable efforts to have the Denovo Warrants posted for trading on the Exchange. A 7% finder's fee, payable in cash or Common Shares, may be paid on a portion of the private placement for subscriptions received from non-insiders.

Africa Oil will acquire 11,111,111 Subscription Receipts in the private placement financing, for proceeds of CAD$10 million. At the conclusion of the Acquisition and the private placement financing, Africa Oil will hold approximately 55% (non-diluted) of the issued and outstanding common shares of Horn Petroleum, assuming the private placement is fully subscribed for.

Other Information and Updates

Denovo's Common Shares are currently listed for trading on the Exchange. In accordance with Exchange policy, however, Denovo's Common Shares are currently halted from trading and will remain halted until such time as determined by the Exchange, which, depending on the policies of the Exchange, may not occur until the completion of the Acquisition.

Denovo and Africa Oil will continue to provide further details in respect of the Acquisition, in due course, by way of press releases.

Completion of the Acquisition is subject to a number of conditions, including but not limited to, Exchange acceptance. Where applicable, the Acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the Acquisition will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Acquisition, any information released or received with respect to the Acquisition 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.

The 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.

Denovo is a capital pool company under the policies of the Exchange. Denovo completed its initial public offering on October 5, 2010 and commenced trading on the Exchange on October 12, 2010.

Africa Oil Corp. is a Canadian oil and gas company with assets in Kenya, Ethiopia, Mali and Puntland (Somalia). Africa Oil's East African holdings are in what is considered a truly world-class exploration play fairway. The Company's total gross land package in this prolific region is in excess of 325,000 square kilometers. The East African Rift Basin system is one of the last of the great rift basins to be explored. New discoveries have been announced on all sides of Africa Oil's virtually unexplored land position including the major Albert Graben oil discovery in neighbouring Uganda. Similar to the Albert Graben play model, Africa Oil's concessions have older wells, a legacy database, and host numerous oil seeps indicating a proven petroleum system. Good quality existing seismic show robust leads and prospects throughout Africa Oil's project areas. The Company is listed on the TSX Venture Exchange and on First North at NASDAQ OMX-Stockholm under the symbol "AOI".

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

  • Denovo Capital Corp.
    A. Murray Sinclair
    President and Chief Executive Officer,
    Chief Financial Officer and Director
    (604) 689-1428