RB Energy Inc.

RB Energy Inc.

April 06, 2015 08:00 ET

RB Energy Provides an Update on the Status of Sale and Investor Solicitation Process

VANCOUVER, BRITISH COLUMBIA--(Marketwired - April 6, 2015) - RB Energy Inc. (the "Company" or "RB Energy") provides an update on the status of the Court approved sale and investor solicitation process (the "SISP"). No "Qualified Offers" were received by the SISP deadline of March 27, 2015 (the "Offer Deadline"). The Company has developed an alternative course of action to attempt to obtain value for its stakeholders prior to the maturity date of the US $13 million "Debtor-in-Possession" loan ("DIP Loan") of April 15, 2015.

CCAA Proceedings

On October 14, 2014, following consultations with legal and financial advisors, the Company applied for and obtained an Initial Order to commence proceedings under the Companies' Creditors Arrangement Act ("CCAA") in the Québec Superior Court in respect of the Company and its Canadian subsidiaries. The Court granted an initial stay of proceedings to November 13, 2014, which was subsequently extended to April 30, 2015. During the CCAA proceedings, corporate activities and Québec Lithium care and maintenance operations are being funded by the DIP Loan provided by Hale Capital Partners ("DIP Lender") and approved by the Court.

On November 13, 2014, the Court approved the SISP in order for the Company to actively seek a financial and restructuring solution to the Company's current situation in the form of an acquisition of all or a partial interest in its Québec lithium and Chilean iodine projects or of an investment in the Company and a restructuring of its financial obligations, for the benefit of all stakeholders. Rothschild, a leading global financial advisor and investment bank, was engaged by the Company to manage this process.

The SISP

Under the SISP, and with the assistance of Rothschild, RB Energy has actively solicited expressions of interest from third parties for the acquisition of all or a partial interest in its Québec lithium and Chilean iodine projects or for an investment in the Company and a restructuring of its financial obligations.

Third parties that executed a non-disclosure agreement conducted preliminary due diligence over a period that ended on January 23, 2015, the deadline for submission of non-binding letters of intent ("LOIs"). The Company received a number of LOIs by the deadline and advised a number of the interested parties that they had been selected as qualified bidders to continue to conduct due diligence with the goal of submitting final binding offers by the Offer Deadline.

As at the Offer Deadline, no binding offers that were compliant with the requirements of the SISP ("Qualified Offers") were received.

The Company has since consulted with its Court-appointed monitor ("Monitor"), the DIP Lender and the agent to its pre-filing lending syndicate ("Agent") to determine an appropriate course of action. As a result of those discussions, and with the consent of the Monitor, the DIP Lender and the Agent, the Company and Rothschild intend to immediately re-engage with certain interested parties identified during the SISP in an expedited process to solicit one or more binding offers by April 14, 2015. There is no assurance that the Company and Rothschild will be successful in securing such offers.

DIP Loan

The DIP Loan becomes due and owing on April 15, 2015. The Company does not currently have the ability to repay the DIP Loan on such date.

There are no assurances that the Company will secure a satisfactory financial solution to the current situation.

Resignation of Directors

Each of the Directors of RB Energy, other than Richard P. Clark, resigned effective April 1, 2015. Mr. Clark will continue as the sole director and CEO to provide direction to the Company during the CCAA proceedings.

About RB Energy Inc.

RB Energy is a Canadian company formed pursuant to the arrangement involving Sirocco Mining Inc. and Canada Lithium Corp. It currently owns Aguas Blancas, an iodine producing mine in northern Chile, and Québec Lithium near Val d'Or, the geographical heart of the Québec mining industry. The Aguas Blancas mine is currently in production. The Québec Lithium mine has completed construction and, prior to going into care and maintenance on October 7, 2014, was in the commissioning phase. For more information regarding RB Energy, please refer to its public filings available at www.sedar.com.

Forward-Looking Statements

Certain information contained in this news release, including statements regarding our ability and the timing to successfully emerge from CCAA proceedings; the outcome of the SISP process; the ability to repay the DIP Loan, continue as a going concern and meet obligations as they become due, and achieve value for its stakeholders; the return to active operations and reaching commercial production at Quebec Lithium; the listing or re-listing of our securities on any stock exchange, are forward-looking statements. These forward-looking statements relate to future events or future performance and also reflect the Company's current internal projections, expectations or beliefs and are based on information currently available to the Company. In some cases forward-looking information can be identified by terminology such as "may", "will", "should", "expect", "intend", "plan", "anticipate", "believe", "estimate", "projects", "potential", "scheduled", "forecast", "budget" or the negative of those terms or other comparable terminology. The estimates and assumptions of RBI underlying the forward-looking statements in this news release may prove to be incorrect. Assumptions upon which such forward looking information include, among other things, the ability to continue as a going concern and meet obligations as they become due, to obtain future financing or re-structure in order to successfully emerge from the CCAA proceedings, successful and timely commissioning, ramp-up and production at the Québec Lithium Project; the lack of any further significant capital expenditures during the commissioning stage or to bring the hydrometallurgical process plant into production; the continuing support and cooperation of RBI's off-take partners; as well as financial predictions premised on such assumptions. Although the Company believes that the forward-looking information contained in this news release is based on reasonable assumptions, readers cannot be assured that actual results will be consistent with such statements. Accordingly, readers are cautioned against placing undue reliance on forward-looking information. RBI expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise, except in accordance with applicable securities laws.

On behalf of the Board,

Richard P. Clark, President and CEO

Contact Information