Mart Resources, Inc.
TSX : MMT

Mart Resources, Inc.

November 11, 2015 09:21 ET

Mart Amends Arrangement Agreement and Announces Private Placement With Delta Oil

CALGARY, ALBERTA--(Marketwired - Nov. 11, 2015) - Mart Resources, Inc. (TSX:MMT) ("Mart" or the "Company") announces that further to its press release of October 16, 2015, Mart and Delta Oil Nigeria B.V. ("Delta") have jointly agreed, pursuant to the terms of an amending agreement (the "Amending Agreement") to amend the terms of the arrangement agreement dated October 16, 2015 (the "Arrangement Agreement") in order to provide Delta with additional time to satisfy the financing condition (the "Financing Condition") contained in the Arrangement Agreement. Delta is providing significant equity to the proposed purchase of Mart common shares pursuant to the proposed plan of arrangement but has been sourcing funding for a portion of the purchase price from traditional bank financing. However, as most of Mart's free cash flow is currently being applied towards servicing bank debt due to the depressed oil price, Delta has advised that additional bank funding cannot be obtained until there is an increase in oil price or a change to Mart's borrowing terms. Accordingly Delta will seek alternative sources of funds that will not require debt servicing to satisfy the Financing Condition. The consideration to be paid to Mart shareholders remains unchanged at CAD$0.35 for each Mart common share held for aggregate consideration for all of Mart's current shares of approximately CAD$124.92 million.

Delta has agreed to provide financing to Mart while Delta sources alternative funding, and accordingly in connection with the extension to satisfy the Financing Condition, Delta or a wholly-owned subsidiary thereof has agreed to purchase, on a non-brokered private placement basis, 44,617,000 units ("Units") at a price of CAD$0.18 per Unit for an aggregate consideration of CAD$8,031,060 (payable in US dollars and based on an exchange rate of CAD$1.3283:US$1.00) (the "Private Placement"). Each Unit consists of one Mart common share ("Common Share") and one non-transferable common share purchase warrant ("Warrant"), with each Warrant entitling the holder thereof to acquire one additional Common Share in the capital of the Company at a price of CAD$0.225 per common share (payable in US dollars and based on an exchange rate of CAD$1.3283:US$1.00), expiring February 15, 2016. The closing of the private placement is conditional only upon receipt of the requisite approval of the Arrangement by the holders of Common Shares and options at a special meeting (the "Special Meeting") and the approval of the TSX and will occur forthwith following the Special Meeting. The proceeds of the private placement will be used for general working capital purposes.

If the Financing Condition is not met and the Arrangement transaction does not proceed, Delta or its wholly-owned subsidiary will own approximately 11.11% of the outstanding shares of Mart, and will be entitled to increase their ownership to 19.99% of the outstanding shares of Mart if Delta exercises all of the Warrants.

The Amending Agreement provides the parties with an outside date of February 15, 2016 to satisfy the conditions to the Arrangement, including the Financing Condition, and close the Arrangement transaction. Mart and Delta have agreed to continue to use their reasonable commercial efforts to complete the transaction by January 29, 2016. An information circular regarding the Arrangement is expected to be mailed to Mart security holders in late November 2015 for the Special Meeting which is currently anticipated to take place at the earliest possible date in order to permit Mart to access the proceeds of the Private Placement. The actual closing date of the Arrangement transaction will be dependent on the timing of the satisfaction of the conditions to the Arrangement, including the Financing Condition. Other than amendments to the dates and the inclusion of the Private Placement, all of the other terms and conditions of the Arrangement Agreement remain the same.

FirstEnergy Capital LLP is acting as Mart's financial advisor.

A copy of the Amending Agreement will be made available under the Company's profile on SEDAR at www.sedar.com.

Additional information regarding Mart is available on the Company's website at www.martresources.com and under the Company's profile on SEDAR at www.sedar.com.

Forward Looking Statements and Risks

Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian securities laws. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact and should be viewed as "forward-looking statements". There are "forward-looking statements" included in this press release that relate to the timing of the mailing of the information circular regarding the Arrangement, the meeting date and the closing date. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

There can be no assurance that such forward-looking statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release. The forward-looking statements contained herein are expressly qualified by this cautionary statement. In particular, there is no assurance that the conditions set out in the Arrangement Agreement, including the Financing Condition will be satisfied. There is also no assurance that the Private Placement or the Arrangement will be completed on the timelines indicated or at all. Accordingly, because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.

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