OTTAWA, ONTARIO--(Marketwired - Dec. 8, 2016) - Enablence Technologies Inc. ("Enablence" or the "Company") (TSX VENTURE:ENA), a leading supplier of optical components and subsystems for telecommunication and data centre markets today announced a non-brokered private placement financing (the "Financing") for up to 50,000,000 common shares (the "Shares") at a price of $0.08 per share (the "Issue Price"), subject to TSX Venture Exchange approval.
Enablence intends to use the proceeds from the financing as growth capital for current and future products, plus general corporate purposes. A portion of the proceeds will be used to fund a capex program to optimize Enablence's supply chain. Capital will also be deployed to complete development of the 100G TxRx product for the fast growing data centre market. The balance of the capital will be used for general corporate purposes and working capital. Upon issuance, all securities will be subject to a four month hold period pursuant to applicable securities laws.
Enablence is also pleased to announce the signing of a non-binding Letter of Intent (the "LOI") with Esrey Energy Ltd. ( "Esrey") (TSX VENTURE:EEL) that provides for a combination of the two companies (the "Business Combination"). Under the proposed terms of the LOI, Esrey shareholders will receive approximately 2 shares of Enablence for each share of Esrey owned, and will be based on the net cash remaining in Esrey at closing divided by the Issue Price. Upon completion of the Business Combination, the shareholders of Esrey are expected to own 13.6% of the pro forma company, before accounting for any shares issued as part of the Private Placement. As outlined in the LOI, Enablence and Esrey have entered into a 60-day exclusivity period.
Enablence and Esrey believe that the Business Combination will result in significant benefits to the shareholders of each company, including:
- Enablence shareholders will see the benefit of an enhanced financial position with an increase in available cash of at least $6mm upon the closing of the transaction;
- Esrey shareholders would have the benefit through their ownership of Enablence shares to gain access to the rapidly growing market for optical components. Enablence is well positioned for success in the metro access telecom and data center applications;
- Esrey shareholders are expected to enjoy increased trading liquidity; and
- Esrey may dispose of its remaining oil & gas assets prior to the completion of the Transaction and may distribute the proceeds of any such disposition to its shareholders.
Pursuant to the terms of the LOI, the completion of the Business Combination is conditional upon a number of items, including without limitation, the signing of a Definitive Agreement, completion of satisfactory due diligence, approval of the shareholders of Esrey, receipt of all necessary regulatory approvals, Enablence raising a minimum $4,000,000 by way of the Private Placement and exercise of outstanding warrants, formalization of the legal structure of the transaction and no material adverse change occurring with respect to either Enablence or Esrey.
About Enablence Technologies Inc.
Enablence Technologies Inc. is a publicly traded company (TSX VENTURE:ENA) that designs, manufactures and sells optical components and subsystems to a global customer base. It utilizes its patented technologies including planar lightwave circuit intellectual property in the production of an array of photonics components and broadband subsystems that deliver a key portion of the infrastructure for next-generation telecommunication systems. The Company's product lines address all three segments of optical networks: access (connecting homes and businesses to the network); metro (communication rings within large cities); and long-haul (linking cities and continents). For more information, visit www.enablence.com.
About Esrey Energy Ltd.
Esrey is a Canadian exploration and development company focused on developing oil and gas reserves in Papua New Guinea and Bulgaria. Esrey is headquartered in Vancouver, British Columbia, Canada. For more information, visit www.esreyenergy.com.
This press release may contain forward-looking statements, in particular with respect to the approval of the TSX Venture Exchange, the Business Combination, and future growth of the continuing operations that are made as of the date hereof and are based on current expectations, forecasts and assumptions which involve risks and uncertainties associated with our business and the economic environment in which the business operates. All such statements are made pursuant to the 'safe harbour' provisions of, and are intended to be forward-looking statements under, applicable Canadian securities legislation. Any statements contained herein that are statements of historical facts may be deemed to be forward-looking statements. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. We caution our readers of this press release not to place undue reliance on our forward looking statements as a number of factors could cause actual results or conditions to differ materially from current expectations. Please refer to the risks set forth in the Company's continuous disclosure documents that can be found on SEDAR www.sedar.com. Enablence does not intend, and disclaims any obligation, except as required by law, to update or revise any forward looking statements whether as a result of new information, future events or otherwise.