Feronia Inc.

Feronia Inc.

August 08, 2012 10:35 ET

Feronia Inc. Completes Additional Tranche of Previously Announced Brokered Private Placement

TORONTO, ONTARIO--(Marketwire - Aug. 8, 2012) -


Feronia Inc. ("Feronia" or the "Company") (TSX VENTURE:FRN) today announced that it has completed an additional tranche of its previously announced brokered private placement (the "Offering") for gross proceeds of approximately Cdn.$3,000,000. Together with the gross proceeds from the closing of the first tranche of the Offering completed on July 24, 2012, the Company has raised aggregate gross proceeds of approximately Cdn.$7,800,000 pursuant to the Offering. Further details regarding the first tranche of the Offering are set out in the Company's press release dated July 24, 2012.

Feronia issued two types of securities to purchasers in this tranche of the Offering. The Company received gross proceeds of Cdn.$1,684,000 pursuant to the issuance of 1,684 units (each, a "Debenture Unit"), with each Debenture Unit consisting of one Cdn.$1,000 principal amount 12.0% convertible unsecured subordinated debenture (a "Debenture") and 1,667 common share purchase warrants (each, a "Warrant"). The purchase price for each Debenture Unit was Cdn.$1,000.

Feronia also issued 12,757,753 common shares in the capital of the Company (each, a "Common Share"), for aggregate gross proceeds of Cdn.$1,275,775, at a purchase price of Cdn.$0.10 per share.

The Debentures bear interest at 12.0% per annum, payable semi-annually on the last day of June and December of each year, commencing on December 31, 2012, and are due and payable on July 24, 2017 (the "Maturity Date"). The principal amount of the Debentures is convertible at the holder's option into Common Shares at any time prior to the close of business on the Maturity Date, at a conversion price of Cdn.$0.175 per share, being a ratio of 5,714 Common Shares per Cdn.$1,000 principal amount. The Debentures are governed by a trust indenture which includes customary adjustment provisions to the conversion price.

Each Warrant entitles the holder thereof to purchase one Common Share at a price of Cdn.$0.30 per share until July 24, 2014.

At the closing, Macquarie Private Wealth Inc., Renaissance Securities (Cyprus) Limited and their selling group members, as consideration for acting as agents in connection with the Offering, received an aggregate cash commission equal to 7% of the gross proceeds of this tranche of the Offering and non-transferable options ("Agents' Options") to acquire an aggregate of 783,321 Common Shares at a price of Cdn.$0.175 per share until August 8, 2014. The Company also issued warrants to acquire an aggregate of 224,400 Common Shares, on terms equivalent to the Agents' Options, as a finder's fee to certain finders in connection with this tranche of the Offering.

All securities issued in connection with this tranche of the Offering are subject to a statutory hold expiring on December 9, 2012, in accordance with applicable securities legislation. Feronia has agreed to apply to list the Debentures and the Warrants on the TSX Venture Exchange following the completion of such hold period.

Pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the Offering constitutes a "related party transaction" as insiders of the Company subscribed for an aggregate of 550 Debentures Units and 600,000 Common Shares, or approximately 10% and 2.5%, respectively, of the total number of Debenture Units and Common Shares issued pursuant to the Offering. The Company is relying on exemptions from the formal valuation and minority approval requirements of MI 61-101, based on a determination that the securities of the Company are only listed on the TSX Venture Exchange and that the fair market value of the Offering, insofar as it involves interested parties, does not exceed $2,500,000 and/or 25% of the market capitalization of the Company at the time the Offering was initially announced. The Offering was approved by all of the independent directors of the Company.

The proceeds from the Offering will be used by Feronia for working capital and capital expenditure purposes.

"We are pleased to conclude the second tranche of our financing with participation from both existing shareholders and new investors," said Ravi Sood, Executive Chairman. "This financing strengthens our balance sheet and allows management to operate from a strong working capital position," concluded Mr. Sood.

About Feronia Inc.

Feronia is a large-scale commercial farmland and plantation operator in the DRC. The Company uses modern agricultural practices to operate and develop its oil palm plantations and arable farming business division. Feronia believes in the immense agricultural potential of the DRC for high-quality foodstuffs and edible oils given its ideal climate, excellent soil and highly skilled and experienced workforce. Feronia's management team is comprised of senior agriculturalists with extensive experience in managing both plantations and large-scale mechanized farming operations in emerging markets. Feronia is committed to sustainable agriculture, environmental protection and providing support for local communities. For more information please see www.feronia.com.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities referred to herein in the United States or in any jurisdiction where such offer or sale would be unlawful. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to or for the account or benefit of a "U.S. person" (as defined in Regulation S under the U.S. Securities Act) absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act. No public offering of securities is being made in the United States. Nothing in this announcement constitutes an offer of securities for sale in any jurisdiction where it is unlawful to do so.

Cautionary Notes

Except for statements of historical fact contained herein, the information in this press release constitutes "forward-looking information" within the meaning of Canadian securities law. Such forward-looking information may be identified by words such as "anticipates", "plans", "proposes", "estimates", "intends", "expects", "believes", "may", "will" and include without limitation, statements regarding the use of proceeds of the Offering. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others: fluctuations in currency exchange rates; a shift in commodity trends and demands; fluctuations in the world market; and stock market volatility. Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.

The distribution of this announcement in certain jurisdictions may be restricted by law. Persons into whose possession this announcement comes are required by each of the Company and the Agents to inform themselves about, and to observe, any such restrictions.

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.

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