Dominion Citrus Limited

Dominion Citrus Limited

July 25, 2017 16:34 ET

Dominion Citrus Announces Proposed Plan of Arrangement to Acquire All Preference Shares for $1.75 per share and Voting Support of Majority Holder of the Preference Shares

TORONTO, ONTARIO--(Marketwired - July 25, 2017) - Dominion Citrus Limited ("DCL" or "Dominion Citrus") announces its proposal to proceed with a Plan of Arrangement between DCL and Dominion Subco Inc. ("Subco") pursuant to which Subco would acquire all of the 1,021,150 issued and outstanding Series A Preference Shares of Dominion Citrus (the "Preference Shares") for $1.75 per Preference Share. The proposed Plan of Arrangement will include a settlement and release of all claims (if any) which holders of Preference Shares may have against DCL and its affiliates, without further payment. The proposed Plan of Arrangement will be subject to shareholder approval and court approval in accordance with the Business Corporations Act (Ontario).

The Preference Shares were listed on the Toronto Stock Exchange (the "TSX") until February 18, 2016 when they were de-listed for failure to satisfy continued listing conditions prescribed by the TSX. The 90-day weighted average price of the Preference Shares on the TSX prior to the trading halt on January 18, 2016 was $0.44 per Preference Share. The proposed payment of $1.75 per Preference Share pursuant to the proposed Plan of Arrangement reflects a premium of approximately 298% based on that weighted average trading price.

In conjunction with the proposed Plan of Arrangement, DCL has entered into a Voting and Support Agreement with Solar Harvest Company Ltd. ("Solar Harvest") whereby Solar Harvest has agreed to vote all of the Preference Shares that it owns or controls in favour of the proposed Plan of Arrangement. Solar Harvest owns 528,000 Preference Shares, representing approximately 52% of the issued and outstanding Preference Shares. Solar Harvest had sued DCL in the Superior Court of Justice in Ontario for a declaration that Dominion Citrus is indebted to Solar Harvest for $1,188,000, being $2.25 for the 528,000 Series A Preference Shares of Dominion Citrus owned by Solar Harvest, and that Solar Harvest is entitled to payment of a semi-annual cash dividend on those shares at a rate of prime plus 2% (with a minimum dividend rate of 4% and maximum dividend rate of 8%) from June 30, 2009 to the date of the redemption of such shares. Solar Harvest also claimed damages in those amounts and costs of the proceeding. On completion of the proposed Plan of Arrangement and payment of $1.75 per Preference Share, Solar Harvest's lawsuit will be dismissed on a with prejudice and without costs basis, without further payment.

About Dominion Citrus

DCL and Subco are subsidiaries of Dominion Holding Corporation ("DHC"). On July 29 2016, DHC acquired all of the outstanding common shares of Dominion Citrus and approximately $19.258 million of secured Participating Notes owed by Dominion Citrus for approximately $10.8 million in cash. The Preference Shares of Dominion Citrus are publicly held by numerous shareholders. Subco is wholly owned by DHC.

Dominion Citrus is a diversified food company supplying fresh produce to a wide variety of customers in retail, foodservice and food distribution businesses. Dominion Citrus provides procurement, processing, repacking, sorting, grading, warehousing and distribution services to its major domestic markets being Ontario and Quebec. Dominion Citrus also supplies products to customers in the United States. Dominion Citrus's website may be accessed at www.dominioncitrus.com.

Important Notice

This press release does not constitute an offer to buy or the solicitation of an offer to sell any securities of DCL.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking information within the meaning of applicable securities laws ("forward-looking statements") that relate to the proposed Plan of Arrangement. Such forward-looking statements involve known and unknown risks, uncertainties and other factors and assumptions that may cause the actual events in respect of the proposed Plan of Arrangement to differ materially from the anticipated events expressed or implied by such forward-looking statements. Such statements and factors include, but are not limited to: the proposed Plan of Arrangement and any further subsequent transaction; the ability to obtain shareholder approval on the terms as announced or at all; the outcome and merits of the proposed Plan of Arrangement; expected timing of the delivery and availability of circulars and relevant materials in connection with the proposed Plan of Arrangement; the effect that the proposed Plan of Arrangement may have on the operational or financial conditions of DCL; availability of financing if required in connection with the proposed Plan of Arrangement; developments in the capital markets; material adverse developments in DCL's business; and other factors discussed under "Risk Factors" in DCL's continuous disclosure materials and other documents filed with Canadian provincial securities regulatory authorities. Readers are cautioned not to place undue reliance upon any such forward- looking statements, which speak only as of the date made. DCL does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

Contact Information

  • Paul Scarafile
    President & CEO

    Dominion Citrus Limited
    165 The Queensway, Suite 302
    Toronto, Ontario, M8Y 1H8
    Tel: (416) 259-6328 x 250