SOURCE: Russell Breweries Inc.

Russell Breweries Inc.

May 07, 2014 13:56 ET

Russell Breweries Inc. Announces Completion of Portion of Non-Brokered Private Placement

VANCOUVER, BC--(Marketwired - May 07, 2014) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT AUTHORIZED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Russell Breweries Inc. (TSX VENTURE: RB) (the "Company") is pleased to announce that it has completed the first tranche of its non-brokered private placement (the "Private Placement") of common shares of the Company (the "Shares") previously announced on March 20, 2014. Under the Private Placement, the Company issued and sold 7,083,333 Shares for aggregate gross proceeds of $424,999.98. 

The Shares issued pursuant to the Private Placement are subject to a hold period of four months and one day from the closing date.

On the basis that one of the subscribers of the Private Placement, Benjamin Li Yu, is a director and interim CEO of the Company, the sale and issuance of 1,666,666 Shares to Mr. Yu is a "related party transaction" within the meaning of Multilateral Instrument 61 101 ("MI 61 101"). 

In conducting their review and approval process with respect to the sale and issuance of 1,666,666 Shares to Mr. Yu, the board of directors of the Company determined that the distribution of an information circular to shareholders, the preparation and distribution of a formal valuation and the seeking of shareholder approval for, and in connection with, the such sale and issuance of Shares is not necessary under MI 61 101 because:

(a) for the purposes of Sections 5.5(a) and 5.7(1)(a) of MI 61 101 the board of directors of the Company determined, in good faith, that the fair market value of such Shares will not exceed 25% of the market capitalization of the Company, and on that basis the proposed sale and issuance of such Shares falls within an exemption from the formal valuation requirement of Section 5.4 of MI 61 101 and from the minority shareholder approval requirement of Section 5.6 of MI 61 101; and

(b) the disinterested directors of the Company (i.e., those other than Mr. Yu) have all approved such sale and issuance of Shares.

Mr. Yu owned or controlled 0.2% of the issued and outstanding Shares prior to the closing of the first tranche of the Private Placement. Following the closing of the first tranche of the Private Placement, Mr. Yu owns or controls 2.2% of the issued and outstanding Shares.

About Russell Breweries Inc.

Russell Breweries Inc. is a leading Western Canadian brewer. It brews, markets, sells and distributes a diverse portfolio of award-winning beers that are produced by its wholly-owned regional breweries: Russell Brewing Company in British Columbia and Fort Garry Brewing Company in Manitoba. Both breweries are dedicated to producing high-quality, flavourful ales and lagers. Russell Breweries Inc. is publicly listed on the TSX Venture Exchange (TSX VENTURE: RB).

Forward-Looking Information

This release includes certain statements that are deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address events or developments that the Company expects to occur, are forward-­looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include: the completion of the Private Placement, receiving regulatory approval of the Private Placement, the use of the proceeds of the Private Placement and future performance of the Company. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. Except as required by applicable securities laws, the Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.

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