VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 26, 2012) -
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Zidane Capital Corp. (TSX VENTURE:ZZE.P) ("Zidane") is pleased to announce that it has signed a letter of intent (the "LOI") with Grid Essence Holdings Inc., a corporation existing under the laws of Cyprus ("Grid Essence"), which outlines the general terms and conditions pursuant to which Zidane and Grid Essence would be willing to complete a transaction that will result in a reverse take-over of Zidane by the shareholders of Grid Essence (the "Transaction"). The LOI was negotiated at arm's length and is effective as of September 24, 2012.
The LOI is to be superseded by a definitive merger, amalgamation or share exchange agreement (the "Definitive Agreement") to be signed on or before October 31, 2012 (or such other date as may be mutually agreed in writing between Zidane and Grid Essence). The Transaction is subject to requisite regulatory approval, including the approval of the TSX Venture Exchange (the "TSXV") and standard closing conditions, including the approval of the directors of each of Zidane and Grid Essence of the Definitive Agreement and completion of due diligence investigations to the satisfaction of each of Zidane and Grid Essence, as well as the conditions described below. The legal structure for the Transaction will be confirmed after the parties have considered all applicable tax, securities law and accounting efficiencies, however, it is currently contemplated that the transaction will be structured as an amalgamation.
Zidane is incorporated under the provisions of the Business Corporations Act (British Columbia) with its registered and head office in Vancouver, British Columbia. It is a capital pool company and intends for the Transaction to constitute its "Qualifying Transaction" as such term is defined in the policies of the TSXV. Zidane is a "reporting issuer" in the provinces of British Columbia and Alberta.
Since the Transaction is not a non-arm's length transaction, Zidane is not required to obtain shareholder approval for the Transaction. Trading in the common shares of Zidane is halted at present. It is unlikely that the common shares of Zidane will resume trading until the Transaction is completed and approved by the TSXV.
Conditions to Transaction
Prior to completion of the Transaction (and as conditions of closing):
- Grid Essence intends to complete a financing (the "Debenture Offering") for minimum gross proceeds of not less than Cdn.$20,000,000 through the issuance of debentures (the "Debentures"). The Debentures will be convertible into units of Grid Essence, at a price to 80% of the Transaction price immediately prior to the closing of the Transaction and exchanged into corresponding securities of Zidane in accordance with the Exchange Ratio (as defined herein). Each unit shall consist of one common share (a "Grid Essence Share") and one-half of one share purchase warrant (a "Grid Essence Warrant"). Each whole Grid Essence Warrant will entitle the holder thereof to acquire one Grid Essence Share at an exercise price to be determined in the context of the market for a period of twenty four months from date of issuance.
- Grid Essence completing a financing (the "Offering") for minimum gross proceeds of not less than Cdn.$30,000,000 at an issue price to be determined in the context of the market. Each unit shall consist of one Grid Essence Share and one-half of one Grid Essence Warrant. Each whole Grid Essence Warrant will entitle the holder thereof to acquire one Grid Essence Share at an exercise price to be determined in the context of the market for a period of twenty four months from date of issuance. It is expected that the Offering will close immediately prior to the closing of the Transaction and exchanged into corresponding securities of Zidane in accordance with the Exchange Ratio (as defined herein).
- Zidane shall consolidate (the "Zidane Consolidation") its existing common shares (each an "Existing Zidane Share") at a ratio of one new common share of Zidane (each a "Zidane Share") for every three Existing Zidane Share.
- The parties will prepare a filing statement in accordance with the rules of the TSXV, outlining the terms of the Transaction.
- Grid Essence and Zidane will enter into a Definitive Agreement in respect to the Transaction on or before October 31, 2012.
- Grid Essence will obtain the requisite shareholder approvals for the Transaction and any ancillary matters contemplated in the Definitive Agreement.
- All requisite regulatory approvals relating to the Transaction, including, without limitation, TSXV approval, will have been obtained.
The Proposed Transaction
Pre-Closing Capitalization of Zidane
As of the date hereof, Zidane has 3,139,052 Existing Zidane Shares outstanding and securities exercisable or exchangeable for, or convertible into, or other rights to acquire, an aggregate of 367,448 Existing Zidane Shares at an exercise price of Cdn.$0.20 per Existing Zidane Share. Upon completion of the Zidane Consolidation, Zidane will have 1,046,351 Zidane Shares outstanding and securities exercisable or exchangeable for, or convertible into, or other rights to acquire, an aggregate of 122,483 Zidane Shares at an exercise price of $0.60 per Zidane Share.
Pre-Closing Capitalization of Grid Essence
As of the date hereof, Grid Essence has 25,000,000 Grid Essence Shares issued and outstanding.
Terms of the Transaction
Zidane proposes to acquire all of the Grid Essence Shares pursuant to the terms of a Definitive Agreement. It is expected that the shareholders of Grid Essence will receive an aggregate of 83,333,333 Zidane Shares (on a post-consolidation basis) in exchange for all of the issued and outstanding Grid Essence Shares. The subscribers to the Debenture Offering and Offering will receive one Zidane Share (on a post-consolidation basis) for each Grid Essence Share held (the "Exchange Ratio") resulting in the Zidane Shareholders holding approximately 1% of the common shares of the combined entity (the "Resulting Issuer") and the former Grid Essence Shareholders holding approximately 99% of the common shares of the Resulting Issuer upon completion of the Transaction (immediately prior to giving effect to the Debenture Offering and Offering). In addition, all securities exercisable or exchangeable for, or convertible into, Grid Essence Shares will be exercisable into Zidane Shares on the same terms and conditions as the currently outstanding Grid Essence securities.
Zidane has agreed to pay a commission ("Commission") to Hampton Securities Ltd. of $200,000. The Commission will be satisfied through the issuance of units at a price equal to the Offering price and shall be identical to the units issued pursuant to the Offering.
About Grid Essence
Grid Essence is a Cyprus company incorporated in 2012. Grid Essence was established to become a global independent power producer producing energy from 100% renewable energy sources ("RES"). Grid Essence's mission is to own and operate at least 1gigawatt of renewable energy producing plants over the next 5 years, initially focusing on solar generation. Grid Essence wishes to build a solid platform as a RES power producer to take advantage of the upside offered by evolving renewable energy technologies such as energy storage.
Grid Essence currently has the following photovoltaics ("PV") projects under contract totalling an aggregate of 51 megawatts ("MW"):
- A 22.5 MW portfolio of solar parks in Germany from one seller:
- 6.29 MW solar park located in Mecklenburg, Germany
Estimated total yearly production of renewable energy: 6,183,000 kWh
Has been in operation since December, 2011
- 6.8 MW solar park located in Mecklenburg, Germany
Estimated total yearly production of renewable energy: 6,808,000 kWh
Has been in operation since August, 2011
- 6.4 MW solar park located in Sachsen-Anhalt, Germany
Estimated total yearly production of renewable energy: 6,387,000 kWh
Has been in operation since December, 2011
- 2.97 MW solar park located in Brandenburg, Germany
Estimated total yearly production of renewable energy: 2,924,000 kWh
Has been in operation since December, 2011
- 8.5 MW solar park located in Hergenroth, Germany
Estimated total yearly production of renewable energy: 8,335,000 kWh
- 8 MW solar park located in Selves, France
Estimated total yearly production of renewable energy: 11,600,000 kWh
Currently under construction and is expected to commence operations in December 2012
- 12 MW solar park located in Beaumont, France
Estimated total yearly production of renewable energy: 17,400,000 kWh
Currently under construction and is expected to commence operations in December 2012
Grid Essence has developed an impressive pipeline of solar projects to meet their targets for 2013 and 2014. To secure the execution of its projects, Grid Essence has entered into a framework agreement with Würth Solar (www.wurth-solar.com) to develop up to 150 MW of solar projects worldwide and with Talesun Solar (www.talesun.com) to develop up to 100 MW of solar projects.
The controlling shareholders of Grid Essence are Josef Barr and Steve Bourbonnais, who in the aggregate, together with their associates, own or control approximately 100% of the issued and outstanding securities of Grid Essence.
Upon completion of the Transaction, it is the intention of the parties that the Resulting Issuer will be renamed "Grid Essence Corporation".
Financial Information Concerning Grid Essence
For the period from incorporation to August 31, 2012, Grid Essence had current assets of EUR250,000 and long term liabilities of EUR250,000.
Insiders, Officers and Board of Directors of the Resulting Issuer
Upon completion of the Transaction, it is anticipated that the board of directors of the Resulting Issuer shall be comprised of Josef Barr, Steve Bourbonnais, Nicolaus Diedrich and Jay Vieira. In addition, it is expected that the officers of the Resulting Issuer shall be Steve Bourbonnais (Chief Executive Officer), Josef Barr (Executive Chairman) and Charles Savva (Chief Financial Officer).
The following sets outs the names and backgrounds of all persons who are expected to be considered insiders of the Resulting Issuer.
Josef Barr, Executive Chairman and Director
Mr. Barr, who is the co-founder of Grid Essence, is the founder of Premium Investments AG, a Switzerland based real estate investment firm. During the last 30 years, Mr. Barr has developed, financed and constructed various high profile real estate ventures in Germany with more than 1,900 loft conversions and a portfolio of 1,000 apartments managed by his real estate team. He is also the founder of Green Enesys GmbH, a Switzerland based renewable energy business integrator. An entrepreneur at heart, Mr. Barr has over 8 years of experience within the renewable energy project development. Over the years, Mr. Barr has built a strong network of financing partners in European banks, EPC providers and project developers in both real estate and renewable energy space.
Steve Bourbonnais, Chief Executive Officer and Director
Mr. Bourbonnais, who is the co-founder of Grid Essence, has extensive experience in financing various energy and oil companies. He is the founder of Euro Catalysts Capital SA ("ECC"), a Swiss based corporate finance advisory firm focused on the renewable energy sector. Mr. Bourbonnais has been instrumental in achieving several public reverse take-overs, including one within the renewable energy sector. Over the years via his entrepreneurial deal making, he has built important business relationships with many international investment banks, infrastructure funds and other institutional investors including key renewable energy players. Before ECC, Mr. Bourbonnais started his career as a futures trader in Toronto and moved on to Credit Lyonnais Rouse in New York, as head of proprietary trading. He graduated in 1995 and holds a B.A. in Economics from Bishop's University in Quebec, Canada.
Charles Savva, Chief Financial Officer
Mr. Savva is the Managing Director of Grid Essence. A Canadian, Mr. Savva has resided in Cyprus since 2001 and has over twelve years of experience in providing Cypriot tax and corporate services to multinational companies in Cyprus. His areas of expertise include Cypriot tax, international VAT and IFRS based accounting and financial reporting. Mr. Savva has five years experience with two major banks in Toronto, Canada, and was responsible for the financial reporting of publicly listed mutual funds. In Cyprus, he has worked for an audit firm, as well as major tax advisory and corporate service providers. Mr. Savva has made numerous presentations regarding the uses of Cyprus in international tax planning and has spoken on the subject at conferences in various countries, including Canada, US, Russia, Ukraine, Poland, Romania, Bulgaria, Sweden, and Norway. Mr. Savva holds an MBA degree in Corporate Finance from the internationally renowned Schulich School of Business, is a UK qualified Chartered Accountant and a member of the Society of Trust and Estate Practitioners.
Jay Vieira, Director
Mr. Vieira is, and has been since 2006, a partner with the law firm of Fogler, Rubinoff LLP, Toronto, Ontario. Prior to that and since 2000, Mr. Vieira was an associate with Sui & Pathak, Sui & Company and Himlefarb, Prozanski as well as being a sole practitioner. Mr. Vieira focuses on the area of securities and corporate finance. Mr. Vieira is a member of the Canadian and Ontario bar associations and the Law Society of Upper Canada. Mr. Vieira was admitted to the Ontario bar in 1999 after obtaining his LL.B. from the University of Windsor Law School. Mr. Vieira holds a B.A. (Hons.) in Humanities from McMaster University.
Nicolaus Diedrich, Director
Since 2007 Mr. Diedrich has been the managing partner in several companies involved in the renewable energy and real estate sector with a focus on managing 3P Solar, a renewable energy and private equity fund asset manager and a 70MW CSP project development in Greece. With 3P Condor and 3P Invest, 3P Solar's business includes a Luxemburg based fund company and a real estate asset management and development unit. Prior to his involvement with 3P Solar, Mr. Diedrich spent 7 years in investment banking / global markets at Deutsche Bank and Merrill Lynch with focus on ABS and structured finance and 15 years at Commerzbank and Westdeutsche Landesbank running the trading and sales departments in fixed income and derivative products. Mr. Diedrich holds a MBA in economics from the University of Cologne, Germany.
Sponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless exempt in accordance with TSXV policies. Zidane is currently reviewing the requirements for sponsorship and may apply for an exemption from the sponsorship requirements pursuant to the policies of the TSXV, however, there is no assurance that Zidane will ultimately obtain this exemption. Zidane intends to include any additional information regarding sponsorship in a subsequent press release.
All information contained in this news release with respect to Zidane and Grid Essence was supplied by the parties respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.
Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and, if applicable, pursuant to the requirements of the TSXV, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to: the terms and conditions of the proposed Transaction; the terms and conditions of the proposed Offering; future exploration and testing; use of funds; and the business and operations of the Resulting Issuer after the proposed transaction. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; and the results of current exploration and testing. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Zidane and Grid Essence disclaim 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 required by law.
The TSX Venture Exchange Inc. 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 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.