Amir Mousavi

November 26, 2010 17:20 ET

Dissident Shareholder Response to RPT Resources' Delay Tactic and Request for Recommencement of Shareholder Meeting

TORONTO, ONTARIO--(Marketwire - Nov. 26, 2010) - As a response to RPT Resources Ltd.'s ("RPT") delay tactics in regards to the dissident proxy circular filed on SEDAR with RPT on November 19, 2010, Mr. Amir Mousavi stated "On November 22, 2010, three days after the filing of the dissident proxy circular, RPT's management suddenly executed a letter of intent to complete a business combination with ArPetrol Inc. in which RPT's management advised that they have been working on for some time. RPT's management also advised shareholders that they cancelled the December 3, 2010 shareholder meeting as RPT would require shareholder approval for the business combination. If RPT's management was working on this transaction for some time, why did RPT's management not do the prudent thing and wait until they had finalized the letter of intent and then include it in the announcement of the shareholder meeting? Why did RPT's management squander the shareholders capital with the payment of the costs for the preparation of the meeting circular, printing and mailing costs? If this business combination transaction was something that management had been working on for some time, then, was it necessary for RPT's management to recently extend the consulting contract with MetaLeach Limited at the cost of US$25,000.00 per month to RPT so that MetaLeach could continue seeking out mineral properties which may be suitable for application of the proprietary mineral processing technology developed exclusively by MetaLeach Limited? It is my opinion that the letter of intent to complete a business combination is purely a delay tactic and if the business combination actually comes to fruition, it will only serve to dilute the concerned shareholders vote. The dissident proxy circular filed by myself suggested that management was incapable of investing the capital of RPT in a manner that will create shareholder value. The hurried execution of this letter of intent and the timing of the execution of the letter of intent proves this point." Mr. Mousavi added "I believe that management's tactic now jeopardizes what remains of the RPT shareholders capital."

Mr. Mousavi commented on a previous failed attempt to perform a business combination with ArPetrol Inc. five months ago "The letter of intent for the business combination was with privately held ArPetrol Inc. On June 29, 2010, another public company, PetroGlobe Inc. (TSX Venture Exchange listed company) announced a similar reverse takeover (RTO) transaction with ArPetrol Inc. In the June 29, 2010 announcement, ArPetrol was given a $50,000,000 private valuation although it had shareholders equity of only $18,300,000 and working capital of $1,200,000, that included current liabilities of $1,200,000. The business combination with ArPetrol and PetroGlobe failed due to the inability of the companies to raise $20,000,000 in necessary financings. ArPetrol's attempt at an RTO failed as management was unable to raise capital from investors who would be investing directly in the ArPetrol Inc. transaction. Now RPT's management believes it is beneficial to shareholders of RPT if they are forced to invest in ArPetrol via an RTO, " advised Mr. Mousavi.

"The press release issued by management of RPT advised that the combined cash of the amalgamated company would be in excess of $25,000,000. From RPT's latest financial statements, RPT has only $13,000,000 of capital remaining from the $16 million which was raised in 2007 (the majority of the depletion of capital since then is related to management salaries and consultant fees). Therefore, since the June 29, 2010 press release where ArPetrol had $1,200,000 in working capital, combined management would need to raise at least an additional $12,000,000 net of commissions and fees, which will effectively dilute the shareholders of RPT, the targeted concerned shareholder that has stood up to management and the RPT shareholders that have come to join his dissident group.. If the additional funds are not raised, then the business combination will be a failure similar to the PetroGlobe deal five months ago." he added.

As reported in June 29, 2010, announcement by PetroGlobe Inc., the previous failed business combination of ArPetrol and PetroGlobal had a non-completion fee of up to $1,500,000. "The non-completion fee of the previous failed RTO for ArPetrol was agreed to prior to getting shareholder approval for the transaction. A similar non-completion fee agreed to by current RPT management would be detrimental to all RPT shareholders. It is noteworthy to point out that RPT management are not significant shareholders in RPT." stated Mr. Mousavi.

"The legal costs associated with the execution of the letter of intent, the excessive legal fees that may be charged to RPT in delaying and fighting the re-commencement of the shareholder meeting and the potential use by RPT's management of an extremely expensive proxy solicitation firm will only further deplete the capital of RPT. The large block of concerned shareholders that have already sent in their proxies in support of me would like their voices to be heard in a timely and a cost effective manner. RPT shareholders have a right to choose their Board of Directors, so I request that RPT's management re-schedule the shareholder meeting prior to any further financings, signing of any agreements with ArPetrol, which may have costly non-completion fees, or any other delay tactics from RPT's management. I am issuing this request via a press release to try to save RPT's shareholders from excessive legal costs that RPT will incur due to their managements delay tactics. If a response is not received by December 3, 2010, I will advise my counsel to seek an injunction to have the meeting rescheduled and prevent management from executing a formal agreement with ArPetrol that only serves to disable the concerned shareholders voice and vote," advised Mr. Mousavi. 

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