Pacific Geoinfo Corp.
TSX VENTURE : PGO

Pacific Geoinfo Corp.

December 01, 2006 21:39 ET

Pacific GeoInfo Announces Agreement to Sell Joint Venture Interest in China Production Facility

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 1, 2006) - Pacific GeoInfo Corp. (the "Company") (TSX VENTURE:PGO) announces that it has agreed to sell its joint venture interest in the geospatial processing production facility in China (the "Production Facility") to its joint venture partner for $2.0 million cash.

In December 2004, the Company formed a joint venture with EarthData International Inc. ("EarthData"), a company based in Maryland, in respect of the Company's interests in the Production Facility. Through their respective affiliated companies, PGO Holdings Corporation ("PGOH") and EarthData Pacifica, Inc. ("EDPI"), EarthData Pacifica, Co. ("EDPC") was formed as the joint venture company. Under the terms of the joint venture, profits are shared 50/50 between the two parties, equity in EDPC is held 52.5% by EDPI and 47.5% by PGOH, and voting rights are held 51% by PGOH and 49% by EDPI.

The Company has entered into an agreement dated December 1, 2006 to sell its joint venture interest in EDPC to EDPI for Cdn.$2,000,000 payable in cash in installments (the "Transaction"). The first installment of $500,000 will be payable at the closing of the transaction and the last installment will be due in September 2007. Prior to closing, the Company intends to dissolve PGOH so that the Company will hold its joint venture interest in EDPC directly, which will include the shares held by PGOH in EDPC and shareholder loans to EDPC. The Company will secure EDPI's payment of the remaining cash installments by way of EDPI's promissory note to the Company and a guarantee from Earth Data. In conjunction with the completion of the transaction, existing shareholders' and voting trust agreements between the parties in connection with EDPC and the joint venture will terminate and appropriate mutual releases are to be delivered. The Company will also agree to not compete for a period of three years after closing of the transaction (the "Non-Compete Period") in the business of map processing, as conducted by any of EDPI or its affiliates, successors and assigns (collectively, the "EarthData Parties") currently or at any time during the Non-Compete Period, anywhere in the world where the EarthData Parties engage in such business except in China.

The Company's sale of the joint venture interest in the Production Facility will constitute a disposition of all or substantially all the undertaking of the Company, which will require shareholder approval by special resolution. Shareholder approval will be sought at the Company's next annual general meeting to be held on December 27, 2006. The transaction is also subject to regulatory approval.

Proceeds from the sale of the joint venture interest would enable the Company to pursue other business opportunities with the view of increasing shareholder value. The Company intends to seek new business opportunities following completion of the transaction. Immediately upon completion of the transaction, it is expected that the Company will not meet the TSX Venture Exchange's listings maintenance requirements as a result of no longer operating an active business. The Company's listing may be transferred to NEX until such time as regulatory approval is obtained for a new business.

ON BEHALF OF THE BOARD

Lian Li, President and Director


The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Pacific GeoInfo Corp.
    Lian Li
    President and Director
    (604) 689-9113
    (604) 689-9022 (FAX)
    Website: www.pacificgeoinfo.com