Jaguar Resources Inc.
TSX VENTURE : JRI

Jaguar Resources Inc.

December 04, 2017 14:30 ET

Jaguar Resources Inc. Announces the Right to Acquire the Bonds of Alon Israel Oil Company Ltd., Private Placement and Confirms Issuance of Shares for Debt

CALGARY, ALBERTA--(Marketwired - Dec. 4, 2017) -

THIS PRESS RELEASE IS NOT FOR PUBLICATION OR DISSEMINATION IN THE UNITED STATES, FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW

Jaguar Resources Inc. ("Jaguar" or the "Company") (TSX VENTURE:JRI) is pleased to confirm that it has entered into a definitive escrow arrangement which provides that upon the Company delivering, or causing to be delivered, not less than $210,000,000 USD to a maximum of $400,000,000 USD to the escrow agent under such arrangement (the "Release Conditions"), the escrow agent will release to Jaguar: (i) Series "A" Bonds of Alon Israel Oil Company Ltd., ("Alon") in the aggregate principal amount of at least NIS 1,186,584,678 dated January 22, 2007, which pay interest at a rate of 5.60 percent per annum and which mature on January 22, 2027 (the "Bonds"); and (ii) the entire issued and outstanding share capital of Alon on a fully diluted basis ("Alon Capital", and the acquisition of the Bonds and the Alon Capital, "Transaction"). Pursuant to the Transaction, Jaguar will purchase a minimum 600,000,000 Bonds at a price of $0.35 USD per Bond, representing 51 percent of the outstanding Bonds. If Jaguar acquires such number of Bonds as is equal to or more than 75 percent of the aggregate principal amount of the Bonds, the remaining Holders of Bonds will be required to tender the remaining Bonds to the acquisition subject to applicable law set forth by the Israel Securities Authority and the rules of the Israeli Stock Exchange.

Alon has ownership of 4.0 percent of the Tamar gas field which is located in the Mediterranean Sea offshore Israel; 6,000,000 shares (equivalent to 7.30 percent) of Delek US Holdings Inc., a US based refining company ("Delek") (traded on NYSE under the symbol (DK:US)); a seat on Delek's board of directors; 56.00 percent of Derech Eretz, the operator of Israel's Highway 6 (a private company) and 8.0 percent of Dor Alon Energy, an Israeli fuel/lubricant and retail company.

In order to finance the Transaction, Jaguar is proceeding with its previously announced non-brokered private placement of common shares in the capital of the Company ("Common Shares") which it previously confirmed on July 6, 2017, at a price of $1.20 CDN per share, and is increasing the size of the offering to a minimum of $85 million USD (approximately $109.463 million CDN) (the "Private Placement") to a maximum of $450 million USD (approximately $579.510 million CDN).

In conjunction with closing of the Private Placement, Jaguar plans to issue 6,322,480 Common Shares at a deemed price of $1.20 CDN per Common Share to settle approximately $7,586,976 CDN of corporate debt owed to various arm's and non-arm's length parties of the Company (the "Share Settlement"). The Company also intends to settle all amounts owing to Shadow Tree Income Fund A LP and any remaining payables owed by Jaguar, either pursuant to the Share Settlement or with unallocated proceeds from the Private Placement.

San Gabriel Assets LLC, a Delaware LLC, 100% controlled by Mr. Corbin Blume, the CEO of Jaguar, is expected to be a subscriber under the Private Placement and as a result of the placement may own or control, directly or indirectly, up to approximately 90% of the issued and outstanding shares prior to the issuance of additional Common Shares as a result of the Private Placement. As a result, San Gabriel Assets LLC may become a new "control person" (as defined by the policies of the TSX Venture Exchange (the "Exchange")) of the Company. In connection with obtaining conditional approval of the Exchange for the Private Placement, the Company received disinterested shareholder approval for the creation of a new "control person" (defined by the policies of the Exchange) in the form of written consents obtained from holders of more than 50% of the currently issued and outstanding voting Common Shares. In addition, San Gabriel Assets LLC has agreed with the Exchange and the Company that if it is considered to be a "control person" it will not vote any amount in excess of 19.9% of the issued and outstanding Common Shares purchased by it under the Private Placement, unless the Company has, prior to such time, obtained the necessary shareholder approval to the creation of a new "control person" at a meeting of shareholders. San Gabriel Assets LLC has advised that it is subscribing under the Private Placement for investment purposes only and has no current intention of making a takeover bid or taking the Company private.

Jaguar will hold a shareholders meeting as soon as practicable to approve the creation of a new control person and attend to certain matters necessary for the completion of the Transaction.

In consideration for services provided in connection with the Transaction, Jaguar will pay to Adv. Yaniv Bresler, a corporate advisor, a work fee equal to 2 percent of the purchase price of the Bonds for financial and other advisory services rendered. Jaguar will also pay to Everest Underwriting and Issues Ltd. a work fee equal to 2 percent of the purchase price for advisory service connected to completion of the Transaction.

The Private Placement was unanimously approved by the Board of Directors of the Company (with Mr. Blume declaring his interests in the transaction), as being in the best interests of the Company, and necessary in order for the Company, which is in serious financial difficulty, to continue as a going concern. As Mr. Blume is an insider and related party of the Company, the Company is required to comply with Policy 5.9 of the Exchange (Insider Bids, Going Private Transactions and Related Transactions) which incorporates Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions, unless there is an exemption available. The exemption relied upon by the Company in respect of these transactions is the Financial Hardship exemption. The Board of Directors, including the independent directors, believes that the Private Placement is necessary to correct the financial position of the Company, and address its immediate financial needs and condition. Jaguar is currently insolvent and has been unable to access sources of financing, whether conventional or unconventional. The Board determined, acting as a whole (with Mr. Blume abstaining from such discussions and related votes where appropriate), that the Private Placement represented the only option available to it. Given the financial condition of the Company, its stage of development and the need for immediate funds, it was not feasible for the four member board to form a special committee.

The securities issued pursuant to the Private Placement and Share Settlement will be subject to a four month hold period. The Private Placement, the Share Settlement and the Transaction, which constitutes a Fundamental Acquisition pursuant to the rules of the Exchange, are subject to the submission of final documentation and final approval of the Exchange, as well as shareholder approval.

The Company does not expect to file a material change report in respect of the related party transaction at least 21 days before the closing of the Private Placement, which the Company deems reasonable in the circumstances, in order to avail itself of the proceeds of the Private Placement and complete the Private Placement in an expeditious manner. In addition, given the size of the investment, there was no certainty regarding the completion of the Private Placement and until completed there is no guarantee that the financing will close.

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.

This press release is not an offer of securities of the Company for sale in the United States. The Common Shares of the Company have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and the Common Shares may not be offered or sold in the United States except pursuant to an applicable exemption from such registration. No public offering of securities is being made in the United States.

Cautionary and Forward-Looking Statements

This news release contains forward‐looking statements and forward‐looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward‐looking statements or information. Forward‐looking statements and information are often, but not always, identified by the use of words such as "appear", "seek", "anticipate", "plan", "continue", "estimate", "approximate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "would" and similar expressions. More particularly and without limitation, this news release contains forward-looking statements and information concerning the Share Settlement, the Private Placement and the Transaction. The forward-looking statements and information are based on certain key expectations and assumptions made by Jaguar, including the Exchange approving the Share Settlement and the Private Placement, timely satisfaction of the Release Conditions, shareholders approving the Transaction, Jaguar's creditors accepting the terms of the Share Settlement, the approval of shareholders for the creation of a new "control person" and the closing of the Private Placement, the Share Settlement and the Transaction. Although Jaguar believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable in the circumstances, undue reliance should not be placed on the forward looking statements and information because Jaguar can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties, include, but are not limited to, the TSX Venture Exchange not providing final approval for the Share Settlement, Private Placement or the Transaction, Jaguar's creditors' acceptance of the terms of the Share Settlement, legal or regulatory impediments regarding completion of the Share Settlement, the Private Placement and the Transaction, Jaguar's inability to satisfy the Release Conditions and Jaguar being unable to complete the Share Settlement, Private Placement or the Transaction on terms acceptable to the Company or at all. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward-looking information for anything other than its intended purpose. Jaguar undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law or the TSX Venture Exchange.

Contact Information

  • Corbin Blume, CEO
    Jaguar Resources Inc.
    Main Phone (403) 975-4009
    (403) 264-5455 (FAX)
    Email: ahblume@shaw.ca