Greenwich Global Capital Inc.

October 14, 2009 17:46 ET

Greenwich to Acquire Xinergy Corp. to Complete its Qualifying Transaction


Greenwich Global Capital Inc. (NEX BOARD:GGB.H) ("Greenwich") is pleased to announce that as of October 14, 2009 it has signed a letter agreement (the "Letter Agreement") with Xinergy Corp., a Tennessee corporation ("Xinergy USA" or the "Company"), which outlines the general terms and conditions pursuant to which Greenwich and Xinergy USA would be willing to complete a transaction that will result in a reverse take-over of Greenwich by the shareholders of Xinergy USA and two corporations ("Xinergy Fincos") to be incorporated to facilitate the acquisition (the "Transaction"). The Letter Agreement was negotiated at arm's length.

The Letter Agreement is to be superseded by a definitive agreement, which must be signed by no later than October 27, 2009. The Transaction is subject to requisite regulatory approval, including the approval of the TSX Venture Exchange (the "TSXV") and standard conditions, including boards of directors approval of the definitive agreement and satisfactory mutual due diligence investigations, as well as the conditions described below. The Transaction must be completed on or before the date that is 90 days following closing of the financings described below. The legal structure for the Transaction will be determined after the parties have considered all applicable tax, securities law, and accounting efficiencies.

Since the Transaction is not a non-arm's length transaction, Greenwich is not required to obtain shareholder approval of the Transaction. However, Greenwich will hold a special meeting of shareholders to approve certain matters ancillary to the Transaction, including a name change and a consolidation of its shares.

Conditions to Transaction

Prior to completion of the Transaction (and as conditions of completion):

- Xinergy Fincos must complete subscription receipt financings for gross proceeds of not less than approximately CDN$60.0 million at an issue price to be determined (the "Issue Price"). Xinergy USA has retained the Seaport Group as its financial advisor and has retained GMP Securities L.P. and Canaccord Capital Corporation as agents to lead the financings. The subscription receipts will convert into units of Xinergy Fincos immediately prior to or after closing of the acquisition by Greenwich of the shares of Xinergy USA or will be cancelled if the Transaction is not completed within 90 days following closing of the financings. The units will consist of common shares and warrants for the purchase of common shares. The agents for the financings will receive a 6% cash commission and broker warrants entitling them to acquire that number of common shares that is equal to 6% of the number of subscription receipts issued in the offering for a period of 18 months at a price that is at a 15% premium to the Issue Price. Greenwich will also acquire the shares of Xinergy Fincos. The net proceeds from the financings will be used to repay debt, for corporate acquisitions and for general corporate purposes.

- Greenwich will, with appropriate shareholder approval, consolidate its common shares so that the number of issued shares prior to completion of the Transaction will equal the amount of net free available cash of Greenwich (which shall not be less than CDN$600,000) plus CDN$350,000 divided by the portion of the Issue Price that is allocated to the common shares that form part of the unit into which the subscription receipts are convertible.

- Greenwich will, with appropriate shareholder approval, change its name to a name that is selected by Xinergy USA.

- Greenwich will, with appropriate shareholder approval, change its authorized capital to provide for the issue of non-voting shares.

- Greenwich will, with appropriate shareholder approval, implement a new stock option plan for directors, officers, employees and consultants.

- Greenwich will seek shareholder approval to the consolidation, the name change, the change of its authorized capital and the new stock option plan at a shareholders' meeting to be held on or before December 4, 2009. At the shareholders' meeting, Greenwich will also seek approval to appoint nominees of Xinergy to its board if, as and when the Transaction is completed. Xinergy USA will provide input with respect to the management information circular to be sent to Greenwich shareholders.

- Greenwich will prepare a filing statement in accordance with the rules of the TSX-V (the "Filing Statement"), outlining the terms of the Transaction. Xinergy USA will provide assistance and details as to the business, assets, properties and operations of Xinergy USA. In connection with the Filing Statement, Xinergy USA will be responsible for any and all audited financial statements (and pro forma financial statements) as well as the National Instrument 43-101 compliant technical report with respect to the material properties of Xinergy USA, located in Tennessee, Alabama and Kentucky.

The Transaction

Greenwich will acquire all of the shares of Xinergy USA and Xinergy Fincos. Each shareholder of Xinergy USA and of Xinergy Fincos will receive one common share of Greenwich (on a post-consolidation basis) for each one common share of Xinergy USA or Xinergy Fincos (as applicable) held (the "Exchange Ratio"). Following closing, all outstanding options, warrants or other convertible securities of Xinergy USA and Xinergy Fincos will entitle the holders thereof to acquire common shares of Greenwich based upon the Exchange Ratio.

On closing, all directors and officers of Greenwich will resign and nominees of Xinergy USA will be appointed. Assuming the proposed financings are fully subscribed, following closing (and the consolidation) former shareholders of Greenwich will own approximately 1% of the shares of Greenwich and former shareholders of Xinergy USA and Xinergy Fincos, on a combined basis, will own approximately 99% of the shares of Greenwich, each on a non-diluted basis.

About Xinergy USA

Xinergy USA is a privately-held, high quality thermal coal producer with current operations and additional development properties in Kentucky, Alabama and Tennessee. The Company has been in production since 2008 and has diversified production across surface, highwall miner and underground mining operations. Xinergy sells predominantly to regional utilities through a mix of forward contracts and short-term sales.

Xinergy USA's growth strategy includes continued growth in reserve size over next five years under its current drilling program, as well as strategic acquisitions. The Company's management team is experienced and aligned, with over 100 years combined coal sector and capital market experience, and deep relationships with local government permitting officials.

Xinergy USA is committed to the communities in which they operate. Involvement includes charities focusing on Appalachia, children and feeding those in need. The Company is incorporated under the laws of Tennessee and its corporate office is located in Knoxville, Tennessee.

The table below sets out certain selected financial information regarding Xinergy USA as at, and for the 12 months ended, December 31, 2008, the last financial year for Xinergy USA. Such information is audited and was prepared in accordance with US generally accepted accounting principles.


Current assets $7,896,000

Property plant and equipment 34,182,000

Other assets 13,234,000

Total assets $55,312,000

Current liabilities $8,900,000

Notes payable 34,911,000

Other liabilities 8,504,000

Total liabilities 52,715,000

Shareholders equity 2,597,000

Total liabilities and equity $55,312,000


Coal sales $57,581,000

Gross profit 8,421,000

Operating loss 1,347,000

Net loss $5,363,000

Insiders, Officers and Board of Directors of the Resulting Issuer

Upon completion of the Transaction all of the existing directors and officers of Greenwich will resign and it is anticipated that the board of directors will consist of persons nominated by Xinergy USA. Such persons have not been identified to date.

The shares of Xinergy USA are held by approximately 80 shareholders, all of whom deal at arm's length to Greenwich. The only shareholder of Xinergy USA who owns more than 10% of the outstanding shares of common stock is Mr. Jon E. Nix. Mr. Nix holds his shares personally and through his holding company, JEN Holdings LLC. Mr. Nix is expected to hold, directly and indirectly, more than 10% of the shares of the resulting issuer following completion of the Transaction. Mr. Nix is the President and CEO of Xinergy USA and has served in this capacity since he founded the Company. Mr. Nix has over 10 years experience in the coal industry coupled with 8 years in the financial sector. He is the former President and CEO of National Coal Corporation (Nasdaq: NCOC) and is resident in Tennessee.

Upon completion of the Transaction, the senior management of Greenwich is expected to be:

Jon E. Nix, CEO and President. Mr. Nix has served as CEO and President since the company's inception. As a fourth generation coal miner, Mr. Nix has over ten years of experience in the coal industry coupled with eight years in the financial sector. Previously, he served as the President and Director of National Coal Corporation (Nasdaq:NCOC) from 2003 to 2004 and was then elected as Chairman of the Board serving until 2007. Mr. Nix holds a Bachelor of Arts degree in Economics from the University of Tennessee, and his main outside interest includes numerous charities and charitable causes. He has served as President and CEO since Xinergy's inception.

John Ledington, Vice President of Operations. Mr. Ledington has over 23 years of experience in all aspects of coal mine design, permitting and implementation, he brings an extraordinary knowledge to Xinergy Straight Creek's decision-making process. His expertise also includes safety, environmental compliance, and the construction and operation of various coal refuse disposal sites throughout southeastern Kentucky. John manages all MSHA regulations and compliance to ensure that the company's adheres to all state and federal guidelines. Mr. Ledington is a member of the Society of Mining Engineers, the Kentucky Association of Professional Surveyors and Kentucky Coal Association.

Charles Kite, General Counsel. Mr. Kite has served as Xinergy's General Counsel and Corporate Secretary since July 2008. Mr. Kite joined the Company with over 35 years of experience as a lawyer and as a key contributor to the community. He received education from Emory University, Carson-Newman College, and obtained his Doctorate of Jurisprudence from the University of Tennessee. His prior employment includes General Counsel for National Coal Corporate; private practice with the Tennessee law firm, Kite, Bowen & Associates; and Senior Trial Attorney with the Internal Revenue Service.

Jeff Samples, Vice President of Sales & Logistics. Mr. Samples joined Xinergy in January of 2009 and brings over 12 years of sales and project management experience in a number of industry fields. As a liaison between Xinergy's Operations team, the railroad and energy customers, he ensures all shipments and contracts are fulfilled accurately and timely. Mr. Samples' key responsibility is to build sales and relationships with Xinergy Corp's industrial and utility partners. Prior to joining Xinergy, Mr. Samples held the position of Vice President of Sales for National Coal and National Coal of Alabama, Inc. Mr. Samples also owned and operated a consulting company which specialized in the field of sales and logistics in the coal industry.

Rodney Mays, Operations Manager. With over 24 years of mining experience, 12 of which in operations management, Mr. Mays is responsible for mine planning, safety, adherence of MSHA guidelines and the daily operations of Xinergy Straight Creek. He holds Surface Foreman Certifications in both Alabama and Kentucky in conjunction with MSHA Part 77 First Aid Certification. Prior to joining Xinergy Corp, Mr. Mays served as the superintendent for Reed Mining, Quality Coal and M.E. Mining Group Inc.

Debra Powers, VP of Finance & Corporate Controller. Mrs. Powers serves as Xinergy's Vice President of Finance and Corporate Controller. Mrs. Powers manages business models, corporate reporting, financial transactions, as well as, staff management. Her previous employment includes the positions of Chief Financial Officer of Business Information Group, Vice President of Accounting for Metron North America, and Cash Director at Goody's Family Clothing (formally NASDAQ:GDYS). Mrs. Powers earned her MBA from University of Tennessee & her BBA in Accountancy from East Tennessee State University. She is also Certified Public Accountant licensed in state of Tennessee.

Harry H. Philpot, Jr, Director of Safety, Health and Miner Training. Mr. Philpot has over 25 years of experience in coal mining plans and implementation along with management of all safety aspects of mining operations. He has assisted in mine plan/projections, ventilation and roof control design and implementation. His expertise includes safety, environmental and health compliance for ongoing mine sites, as well as, education and training of associates in safe work procedures. Mr. Philpot's career, geographically, has included southeastern and western Kentucky, southeastern Illinois, southern Indiana and northern Alabama.


Sponsorship of a qualifying transaction of a capital pool company is required by the TSX-V unless exempt in accordance with TSX-V policies. Greenwich is currently reviewing the requirements for sponsorship and may apply for an exemption from the sponsorship requirements pursuant to the policies of the TSX-V, however there is no assurance that Greenwich will ultimately obtain this exemption.

Greenwich will make a subsequent press release of information regarding sponsorship, the board of directors, any additions to the management team, Xinergy USA's reserves, and details of the financings.

About Greenwich

Greenwich is a capital pool company under Policy 2.4 of the TSX Venture Exchange which completed its initial public offering on May 19, 2005 and is currently listed on the NEX Board (GGB.H). Since its incorporation, Greenwich's sole activity has been to identify and evaluate assets or businesses which, when acquired, would qualify the resulting issuer for listing as a regular issuer on the TSX-V.


This press release contains forward-looking statements with respect to the Transaction and matters concerning the business, operations, strategy, and financial performance of Xinergy USA and Greenwich. These statements generally can be identified by use of forward looking word such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe" or "continue" or the negative thereof or similar variations. The completion of the Transaction and the future business, operations and performance of Xinergy USA discussed herein could differ materially from those expressed or implied by such statements. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the transaction contemplated herein is completed. Forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: the ability of Greenwich to obtain necessary shareholder approval to complete the Transaction or to satisfy the requirements of the TSX-V with respect to the Transaction. The cautionary statements qualify all forward-looking statements attributable to Greenwich and Xinergy USA and persons acting on their behalves. Unless otherwise stated, all forward looking statements speak only as of the date of this press release and Greenwich and Xinergy USA have no obligation to update such statements except as required by law.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSX-V acceptance. The Transaction cannot close until any required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in any filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction 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 TSX-V has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Source:
    Greenwich Global Capital Inc.
    Daniel F. Hachey, President & Chief Executive Officer
    For further information regarding Xinergy USA contact:
    Charles Kite
    General Counsel, Xinergy Corp.