Russell Breweries Inc.
TSX VENTURE : RB

Russell Breweries Inc.

June 12, 2007 08:00 ET

Russell Breweries Inc. Announces Brokered Unit Private Placement for $3.6 Million

Financing for Proposed Acquisition of Fort Garry Brewing Company

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 12, 2007) - Russell Breweries Inc. (TSX VENTURE:RB) is pleased to announce it has arranged a brokered private placement, on a best efforts basis, for up 6,000,000 units at $0.60 to raise gross proceeds of up to $3,600,000.

Each Unit consists of one common share and one non-transferable common share purchase Warrant. Each Warrant entitles the holder to purchase one additional share of the Company at a price of $0.75 for a period of one year from the completion of the financing subject to an early expiry provision which provides that once resale restrictions on the Shares have expired and the Company's shares trade at or above a weighted average trading price of $1.00 for 15 consecutive days the Company may give notice that the Warrants will expire 30 days from the date of providing such notice.

The Units will be offered by the Company's Agent, Bolder Investment Partners, Ltd., to eligible purchasers in the provinces of British Columbia, Alberta and Ontario and other jurisdictions as mutually agreed. The Agent will be paid a cash commission equal to 8% of the gross proceeds of the Offering. In addition, the Agent will be granted 600,000 agent's warrants (the "Agent's Warrants") exercisable for a period of one year from the date of closing of the Offering. Each Agent's Warrant will be exercisable into one (1) common share of the Issuer at $0.60 and will also be subject to early expiry conditions. In addition, the Agent will be paid an administrative fee of $5000, a Corporate Finance Fee of 50,000 units, and reimbursement for of all reasonable expenses related to the Offering. All shares issued pursuant to the Offering, and shares issued pursuant to the exercise of Agent's Warrants, will be subject to a four month hold period. Completion of the financing is subject to the receipt of all required regulatory approvals.

The proceeds of this offering will be used to fund the recently announced proposed acquisition of Fort Garry Brewing Company, assuming it completes, and the balance of funds for the purchase of capital equipment and for general working capital.

"The market has shown a very strong interest in the proposed amalgamation," said Brian Harris, CEO Russell Breweries. "The combination will provide us with the critical mass to proceed actively with our strategic growth plan."

Russell Brewing Company produces premium draught beer for fine pubs and eateries located in British Columbia. In 2006, Russell was recognized as BC's fastest growing brewery. Using all natural ingredients and traditional beer-making techniques, Russell beer is brewed for people who love beer. Products include: Russell Cream Ale, Russell Pale Ale, Russell Honey Blonde Ale, Russell Extra Special Lager plus two seasonal brews, Russell Lemon Ale and Russell Winter Porter. Russell Brewing Company is a wholly owned subsidiary of Russell Breweries Inc. (TSX VENTURE:RB).

Forward Looking Statements

This news release contains forward looking statements regarding Russell's proposed acquisition of the Fort Garry Brewing Company which is subject to many factors, including but not limited to completion of satisfactory mutual due diligence, signing of a definitive agreement and approval of the transaction by the shareholders of Fort Garry. As well all other statements in this press release that do not directly and exclusively to historical facts constitute forward looking statements as of the date of this release. Actual results and developments may differ materially from those contemplated by these statements. The forward looking information contained in this press release is current only as of the date of this press release. There should not be an expectation that such information will in all circumstances be updated, supplemented or revised whether as a result of new information, changing circumstances, future events or otherwise.

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

Contact Information

  • Russell Breweries Inc.
    Brian Harris
    CEO
    Direct: (778) 846-2335 or Brewery: (604) 596-1080
    (604) 599-1048 (FAX)
    Website: www.russellbeer.com