CALGARY, ALBERTA--(Marketwired - July 8, 2016) - Tornado Global Hydrovacs Ltd. ("Tornado") is pleased to announce that its Class "A" Common Shares ("Shares") commenced trading today on the Toronto Venture Stock Exchange ("TSXV") under the symbol "TGH" at the open of market this morning. As background, pursuant to a Plan of Arrangement (the "Arrangement"), effective June 27, 2016, Empire Industries Ltd. ("Empire") spun-out its Hydrovac business including all of the tangible and intangible assets, employees and operations of Tornado Trucks, a division of Empire (the "Hydrovac Business"), to Tornado with a the view of listing on the TSXV.
To ensure that Tornado would be sufficiently capitalized following the closing of the Arrangement, Tornado (through an affiliate which was wound-up into Tornado pursuant to the Arrangement) completed a private placement (the "Private Placement") of subscription receipts ("Subscription Receipts") for an aggregate of approximately US $3,521,127 and RMB 11,946,110. The proceeds of the Private Placement were subject to certain escrow release conditions the last of which was satisfied this morning when the Shares began trading on the TSXV. Accordingly, the Subscription Receipts have now been exchanged for 27,063,783 Shares (representing approximately 45.5% of the issued and outstanding shares of Tornado) and the proceeds of approximately US $3,521,127 and RMB 11,946,110 are releasable to Tornado.
A portion of the proceeds of the Private Placement, in the amount of approximately CDN$4,000,000 will be used by Tornado to capitalize a newly organized wholly foreign owned subsidiary (the "WFOE") of Tornado, to be organized in China to carry on the Hydrovac Business of Tornado in China. An amount of approximately CDN$2,000,000 will be used by Tornado to subscribe for voting securities of the WFOE and an amount of approximately CDN$2,000,000 (the "WFOE Loan") will be loaned by Tornado to the WFOE on acceptable terms and subordinated to the principal lender of the WFOE. Tornado expects to the WFOE to be organized in China on or about October, 2016.
In addition, the former Subscriber Receipt holders who are now shareholders of Tornado (the "New Tornado Shareholders"), previously agreed to provide a secured term loan to Tornado (the "New Tornado Shareholders Loan") in a principal amount of Chinese Renminbi equal to CDN$2,500,000 (the "New Tornado Shareholders Loan Amount"). The New Tornado Shareholders will receive, amongst other things, a subordinated note (the "New Tornado Shareholders Note") in a principal amount equal to the New Tornado Shareholders Loan Amount. The New Tornado Shareholders Note will bear interest at a rate of 8.0% per annum, payable annually for a term of four (4) years. The principal amount of the New Tornado Shareholders Note will be repayable in a lump sum at the end of the term of the loan. The New Tornado Shareholders Note will be secured by all personal property of Tornado and subordinated to Tornado's principal lender.
"The Company is very pleased to be funded with approximately CDN$10 million cash and CDN$6 million of tangible business assets. We are independently pursuing a two pronged strategy of manufacturing and selling our industry leading, patents pending, Hydrovac truck in North America and also leveraging our unique and proprietary Chinese Hydrovac truck design by deploying a service strategy customized to the Chinese excavation market. We have carefully studied the Chinese Hydrovac market opportunity for over three years and determined that our Hydrovac design and features are not present. Hydrovac excavation is an untapped opportunity in China, which is one of the largest excavation markets in the world. We have developed a business plan to introduce our Hydrovac truck to the Chinese excavation service market and recruited the officers and directors to help execute this plan. We have capitalized the company to deploy the Hydrovac trucks in China as a highly specialized, excavation service provider, during our first phase. The second phase will be commenced as soon as the first phase is complete and we have implemented our capital plan to support and penetrate the market with our service strategy throughout all of China," stated Bill Rollins, CEO of Tornado Global Hydrovacs.
About Tornado Global Hydrovacs Ltd.
The company designs, manufactures and sells Hydrovac trucks for excavation service providers to the oil and gas and pipeline industries and the municipal markets in North America. Hydrovac trucks use high pressure water to pulverize soil and turn it into mud and debris, and then vacuum up the resulting mud and debris into its tank. Tornado currently operates in North America and has completed a financing to commence the expansion of its hydrovac business in China.
For more information about Empire, visit www.tghl.ca.
The Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Neither the Exchange nor its Regulation Service Provider (as that term is defined in policies of the Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Certain statements contained in this news release constitute forward-looking statements. These statements relate to future events. All statements other than statements of historical fact are forward-looking statements. The use of the words "may", "expects", "believes", "anticipates" and other words of a similar nature are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although Tornado believes these statements to be reasonable, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. Such statements include statements with respect to the expansion of the Hydrovac Business to China and the results, if any, thereof, any increase in revenue and profitability of the Hydrovac Business and the success of any efforts in respect thereof. Actual results could differ materially from those anticipated in these forward-looking statements as a result of prevailing economic conditions, and other factors, many of which are beyond the control of Tornado. The forward-looking statements contained in this news release represent Tornado's expectations as of the date hereof, and are subject to change after such date. Tornado disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as may be required by applicable securities regulations.