CALGARY, ALBERTA--(Marketwired - June 27, 2016) - PRD Energy Inc. ("PRD" or the "Company") (TSX VENTURE:PRD) today announced that its Board of Directors ("Board") has concluded its review of the Company's strategic alternatives process and determined that an orderly liquidation and dissolution of the Company is the best alternative for maximizing shareholder value. Effective immediately, the Company will cease to carry on business except as may be required to wind up the business and affairs of PRD.
The Board of Directors has called an annual and special meeting of shareholders of PRD (the "Meeting") for August 26, 2016 to approve a number of items, including: (i) the voluntary liquidation and dissolution of the Company; (ii) the delisting of the common shares of PRD ("PRD Shares") from the TSX Venture Exchange; and (iii) certain annual meeting matters, including the election of the Board, and the appointment of Ernst & Young LLP, as auditor of the Company. For the liquidation and dissolution to proceed, the resolution must be approved by way of a special resolution by at least two-thirds of the votes cast by PRD shareholders in person or by proxy at the Meeting.
Dissolution Process and Distribution
Upon receipt of the required shareholder approvals, the Company expects to apply to the applicable Canadian securities commissions to cease to be a reporting issuer as well as seek other exemptive relief from certain ongoing reporting requirements. It is expected that PRD shareholders will receive the net proceeds of the liquidation in two installments. The first distribution, representing the majority of the Company's cash, is anticipated to be made as soon as practical following the receipt of shareholder approval at the Meeting and approval of the Board. The second distribution is expected to be made as soon as practical following receipt of a clearance certificate from the Canada Revenue Agency and approval of the Board.
The amount of the distributions will be determined by the Board following review of the Company's tax and other potential liabilities, which are currently estimated to be $1 million, and its then cash on hand, which as of March 31, 2016 was approximately $13.37 million. Although management of the Company believes that its estimate of liabilities is reasonable based on information currently available to it, the actual amounts of such liabilities may differ materially from the estimates presented above, thereby affecting the cash available to be distributed to the PRD shareholders. The Board is not currently aware of any material item that could give rise to unforeseen tax liabilities or other liabilities or costs which would materially reduce the amount of cash available for distribution to PRD shareholders, but there is no assurance that this will remain the case.
The Company cautions investors that no distributions or returns of capital have been declared by the Board at this time. Notwithstanding receipt of shareholder approvals for the matters described above, the Board may at any time determine that the dissolution of the Company is not the best alternative for maximizing shareholder value and decide not to proceed to implement the proposed transactions.
About PRD Energy
PRD Energy Inc. is a Calgary based oil and gas company engaged in the exploration, development and acquisition of natural gas and crude oil, principally in Europe. PRD Energy's common shares are listed on the TSX Venture Exchange with the symbol "PRD".
Forward looking information
This news release contains forward-looking statements and information within the meaning of applicable securities laws including statements regarding: the holding of the shareholders meeting; the approval of matters to be presented to PRD shareholders at the Meeting; the liabilities of the Company; anticipated distributions to PRD shareholders and expected timing thereof; and the implementation by the Board of the dissolution related transactions.
Although PRD believes that the expectations reflected in its forward-looking statements are reasonable, such statements have been based upon currently available information to PRD. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in forward-looking statements. Risks include, but are not limited to: receipt of all required regulatory and shareholder approvals, changes in tax laws, the ability to liquidate the remaining assets of the Company and make distributions to shareholders, the ability to dissolve PRD and the risks associated with the oil and gas industry. Readers are cautioned to not place undue reliance on forward-looking statements.
The statements in this news release are made as of the date of this release, and, except as required by applicable law, PRD does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement. PRD undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of PRD or the transactions discussed herein.
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.