Press release from Marketwire
BENEV Capital Inc. Announces Closing of Asset Sale Transaction
Friday, May 31, 2013
BENEV Capital Inc. Announces Closing of Asset Sale Transaction12:33 EDT Friday, May 31, 2013
OAKVILLE, ONTARIO--(Marketwired - May 31, 2013) - BENEV Capital Inc. (TSX:BEV) (the "Corporation") announced today the completion of the previously announced proposed sale of its Saint Ambroise, Quebec waste treatment plant and related assets and liabilities to 8439117 Canada Inc., a company indirectly controlled by the plant's current manager, Mr. Jean-Francois Landry (the "Transaction"). Under the asset purchase agreement dated March 7, 2013 (the "Purchase Agreement"), the purchase price for the assets consists of $10 million, $8 million in cash at closing plus an earn out which could be as high as $2 million or more, contingent on a specific potential new contract being entered into within three years from the date of signing of the purchase agreement (which is by no means certain). In addition, the purchase price will be adjusted post-closing for working capital at closing, and for soil contracts received between signing and closing. A copy of the Purchase Agreement has been filed on SEDAR. The Transaction was approved by the shareholders of the Corporation at the annual and special meeting of the shareholders held on May 3, 2013.
As at May 31, 2013, and after the receipt of cash on closing of the Transaction, the Corporation's cash position was approximately $72 million including restricted cash of approximately $0.5 million. The majority of the restricted cash is used to secure a foreign exchange facility which is no longer required now that the sale of the plant has been completed.
Due to its significant tax loss carry forwards and other tax assets, the Corporation is not expected to incur income tax as a result of the consideration received at closing. The tax effects of any additional consideration which may be received in future periods will vary depending upon the amount of tax assets available at that time, if any, to offset such consideration.
Lawrence Haber, the Corporation's Chair and CEO, stated, "BENEV is pleased to announce the completion of this transaction, which we view as mutually beneficial. We wish Jean-Francois Landry and his financial partners great success with the business, and we are confident that he and his team at the plant will continue to provide the same high quality service to customers of the business that they have become accustomed to over the years."
Mr. Haber also stated, "The sale of the plant is consistent with the strategy that we have articulated since the installation of a new Board in June, 2011, namely to source, structure and complete one or more transactions, designed to transform the Corporation and create meaningful value for shareholders. We have said that such transactions may or may not be in the environmental space, and may involve one or more of a sale of all or substantially all of the Corporation's assets, an acquisition, a merger, or a strategic investment. The sale of the plant is the first step in this direction, and we believe it will increase our range of options and provide us with enhanced flexibility on a go forward basis. We will continue to seek to source, structure and complete a transformative transaction; one that enhances value for all shareholders. We also may consider a return of capital, special dividend and/or the dissolution of the Corporation. In the meantime, we will manage our cash conservatively, reduce our expenses where appropriate and remain prudent and patient."
Forward Looking Statements
Certain statements contained in this press release and in certain documents incorporated herein by reference may constitute forward-looking statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe", "confident", "plan" and "intends" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events, performance, or achievements of BENEV Capital Inc. to differ materially from those anticipated or implied in such forward-looking statements. BENEV Capital Inc. believes that the expectations reflected in these forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct. Given these uncertainties, readers are cautioned that forward-looking statements included in this press release are not guarantees of future performance, and such forward-looking statements should not be unduly relied upon. These statements speak only as of the date of this press release. BENEV Capital Inc. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law.
In formulating the forward-looking statements contained herein, management has assumed that business and economic conditions affecting BENEV Capital Inc. will continue substantially in the ordinary course and that the Corporation's shares will continue to trade on the Toronto Stock Exchange. These assumptions, although considered reasonable by management at the time of preparation, may prove to be incorrect.
All of the forward-looking statements made in this Press Release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, BENEV Capital Inc. There can be no assurance that the Corporation's TSX listing will be maintained.
The foregoing description of the Transaction does not purport to be complete and is qualified in its entirety by reference to the copy of the definitive purchase agreement entered into by the Corporation, which is available at www.sedar.com.
FOR FURTHER INFORMATION PLEASE CONTACT:
BENEV Capital Inc.
President and CEO
(905) 339-1540 Ext. 202