Divestco Appoints New Director to its Board of Directors, Enters Into Definitive "Stalking Horse" Agreement to Sell Substantially All of Its Assets and Applies to Court for Process Approval
Calgary, Alberta--(Newsfile Corp. - March 19, 2019) - Divestco Inc. (TSXV: DVT) ("Divestco" or the "Company") is pleased to announce that its Board of Directors has appointed Steve Sinclair-Smith, the Company's current Chief Operating Officer, as a new director of the Company. Mr. Sinclair-Smith has been an integral part of the Divestco team since 2003 and brings to the Board extensive institutional knowledge and experience respecting the day-to-day operations and operational and industry prospects of the Company.
Divestco further announces today that, in connection with its creditor protection proceedings under the Companies' Creditors Arrangement Act (the "CCAA"), the Company has entered into a definitive asset purchase and sale agreement with 2179602 Alberta Ltd. (the "Proposed Purchaser") to sell all or substantially all of Divestco's assets to the Proposed Purchaser for an aggregate estimated purchase price of approximately $15.3 million (the "Acquisition Agreement") and has made an application to the Court of Queen's Bench of Alberta (the "Court") seeking approval of its Monitor-supervised sales solicitation process (the "SSP"). For the purposes of the SSP it is intended that the Proposed Purchaser will serve as the "stalking horse" bidder and the transaction contemplated by the Acquisition Agreement will serve as the "stalking horse" bid (the "Bid"). The Bid is subject to higher or better offers, as other interested parties have an opportunity to submit competing bids.
Under the terms of the Acquisition Agreement, among other things, the Proposed Purchaser will acquire all of the tangible and intangible assets used in the Company's business other than certain excluded assets (which, among other things, include assets that the Proposed Purchaser determines that it wishes to exclude) free and clear of all liabilities, other than certain liabilities that will be specifically assumed (which, among other things, include certain secured indebtedness owing to other Company lenders and amounts owing to critical suppliers). The aggregate estimated purchase price of approximately $15.3 million is comprised of a credit and set-off of debt owing to the Proposed Purchaser of approximately $14.2 million, the assumption of certain assumed liabilities (which have a value currently estimated to be approximately $740,000) and the payment of the actual costs of the CCAA proceedings (which are currently estimated to total approximately $400,000).
The Proposed Purchaser is owned by, among others, a number of the current shareholders, directors and officers of the Company, including Stephen Kirk Popadynetz, Wade Darryl Brillon, Edward Molnar, Michael Brent Gough, Ruth Summers and Marvin Lefebvre. As such individuals are considered to be "related parties" (as such term is defined in Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101")) of the Company, the transaction contemplated by the Bid may be considered a "related party transaction" (as defined in MI 61-101). As the Acquisition Agreement contemplates the acquisition of certain assets and liabilities of the Company, the Bid itself is not expected to affect the percentage of Class A shares of the Company beneficially owned or controlled by the "related parties".
The execution and delivery of the Acquisition Agreement was approved by the disinterested members of the Board of Directors of Divestco and there were no contrary views or disagreements in respect thereof. As the CCAA proceedings and transactions contemplated thereby, including the Bid, have been and will continue to be subject to approval of the Court and the Company has advised the Court of the requirements of MI 61-101, Divestco is relying on the exemptions from the valuation and minority approval requirements of MI 61-101 provided by sections 5.5(f) and 5.7(d), respectively, of the instrument.
As soon as reasonably practicable after receipt by the Company of Court approval of its SSP procedures, the financial advisor of the Company, Grant Thornton Corporate Finance Inc., has confirmed that it will issue a teaser to those parties that have expressed an interest in acquiring the assets of Divestco and will cause a notice of the SSP and such other relevant information as the financial advisor considers appropriate to be published in The Calgary Herald and disseminated via press release through the facilities of Canada Newswire.
A copy of both the Order and the Acquisition Agreement will be filed under the Company's profile on the System for Electronic Document Analysis and Retrieval (www.sedar.ca) and will also be available, along with additional information respecting the CCAA proceedings, on the Monitor's website (www.granthornton.ca). Readers are urged to consult the full text of those documents for further, more detailed, information. While the Divestco Board of Directors has determined that Divestco should enter into the Acquisition Agreement and commence the SSP, there can be no guarantee whatsoever that the CCAA proceedings, the SSP, any transaction contemplated by the Acquisition Agreement or any form of restructuring will resolve Divestco's financial issues or result in the realization by Divestco or Divestco's stakeholders of any particular value.
About the Company
Divestco is an exploration services company that provides a comprehensive and integrated portfolio of data, software, and services to the oil and gas industry. Through continued commitment to align and bundle products and services to generate value for customers, Divestco is creating an unparalleled set of integrated solutions and unique benefits for the marketplace. Divestco's breadth of data, software and services offers customers the ability to access and analyze the information required to make business decisions and to optimize their success in the upstream oil and gas industry. Divestco is headquartered in Calgary and trades on the NEX under the symbol "DVT.H". Additional information on Divestco is available on its website at www.divestco.com and on SEDAR at www.sedar.com.
For more information please contact:
Divestco Inc. (www.divestco.com)
Mr. Stephen Popadynetz
CEO and President
Mr. Steve Sinclair-Smith
Chief Operating Officer
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