Marine BioProducts International Corporation
NEX BOARD : MBP.H

January 10, 2006 21:11 ET

Marine BioProducts International Corporation to Acquire Phoenix Oilfield Hauling

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 10, 2006) - Marine BioProducts International Corporation (NEX BOARD:MBP.H) (the "Company") is pleased to announce that it has entered into a non-binding letter of intent dated December 22, 2005 to enter into a transaction with Phoenix Oilfield Hauling Ltd. ("Phoenix"), a Nisku, Alberta based private company incorporated under the laws of the Province of Alberta providing specialized transportation and material handling services to the oil and gas industry in Western Canada. Under the terms of the transaction, which is expected to be carried out pursuant to a plan of arrangement, the Company will have an option to acquire all of the issued and outstanding shares of Phoenix.

Phoenix specializes in the transportation of products, materials, supplies, and equipment required for the exploration, development and production of petroleum resources. The operations of Phoenix are comprised of a fleet of 37 trucks and 46 trailers working out of field locations in Nisku and Grande Prairie, Alberta with a sales office located in Calgary, Alberta.

Under the terms of the transaction the Company intends to acquire an option to acquire all of the outstanding shares of Phoenix for an exercise price to be agreed upon by both parties. Approximately one half of such exercise price will be payable in cash with the balance payable in securities of the Company. These securities may be subject to escrow or other restrictions imposed by applicable stock exchanges. Completion of the transaction is subject to a number of conditions, including but not limited to the standard commercial conditions, including but not limited to the following; (a) regulatory, and if necessary, shareholder approval to the transaction; and (b) completion of due diligence. In connection with the transaction, the Company intends to effect a consolidation of the Company's shares at a number to be determined and complete a brokered private placement to raise gross proceeds of approximately $15 million. Blackmont Capital Inc. has been engaged to act as agent on the $15 million private placement. The Company intends to call a shareholder meeting to be held on or about late February or early March, 2006 to approve the plan of arrangement and related transactions. The Company also advises that two additional directors, Michael J. Lang, and Jay M. Zammit, have been appointed to the Board. Mr. Lang is currently the Chairman of StoneBridge Merchant Capital Corp., a private equity investment firm, located in Calgary, Alberta, focused on assisting growth oriented emerging public companies. He is currently on the board of directors of CSI Wireless Inc., Creative Door Services Ltd. (a private company), Dynetek Industries Ltd. and is a former Director of Garneau Inc., Calahoo Petroleum Ltd. and Beau Canada Exploration Ltd. Mr. Zammit is a partner at the law firm of Burstall Winger LLP in Calgary, Alberta and practices in the areas of corporate finance and securities, advising on public and private financing matters as well as trusts, funds, reorganizations, takeovers, mergers, shareholder disputes and strategic relationships. He is currently on the board of directors of Antrim Energy Inc. and Raremethod Capital Corp., the board of trustees for Cathedral Energy Services Income Trust (TSX) and acts as corporate secretary for Alternative Fuel Systems Inc. (TSX) and Deep Resources Ltd. In addition, Mr. Zammit is also on the board of directors of several private companies. Upon completion of the acquisition, the existing management of Phoenix will assume substantially all of the management duties at the Company. Additional details regarding the transaction will be available upon execution of formal agreements, which are required to be finalized in January, 2006.

In addition to the foregoing the Company has filed its outstanding financial statements on SEDAR, including the audited financial statements for the years ended December 31, 2003 and December 31, 2004, and the unaudited interim financial statements for the quarters ended up to and including September 30, 2005.

Completion of the transaction is subject to a number of conditions, including but not limited to, TSX Venture Exchange ("TSXV") acceptance, shareholder approval and the lifting of cease trade orders against the Company imposed by the Securities Commissions of the Provinces of British Columbia and Alberta for failure to file financial statements. The transaction cannot close until the required shareholder approval is obtained. The shares of the Company are not expected to trade until such time as the transaction has closed. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular or 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. It is currently expected that the Company will seek an exemption from the Sponsorship requirements of the TSXV in reliance on the arm's length brokered private placement. However, there can be no assurance that the TSXV will not require the Company to obtain a Sponsor in connection with the transaction.

Trading in the securities of the Company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Marine BioProducts International Corporation
    Ronald E. Foreman
    President & CEO
    (604) 523-2400