Western Resources Corp. Accepts Conversion of Shares Held by Vantage Chance Limited
September 20 2022 - 10:23PM
Western Resources Corp. (the “Company”) (TSX: WRX) is pleased to
announce that it has accepted the Conversion Notice (as defined in
the Subscription Agreement dated February 16, 2022, which was
amended and restated on May 20, 2022 and further amended and
restated on July 29, 2022) issued by Vantage Chance Limited
("Vantage"). Pursuant to the Subscription Agreement, Vantage
completed its $80 million investment (the “Investment”) in Western
Potash Holdings Corp. ("WPHC"), a subsidiary of the Company,
whereby it acquired an aggregate of 157,325,071 common shares in
WPHC (“WPHC Shares”), representing approximately 54% of the
outstanding shares of WPHC. WPHC currently 100% owns Western Potash
Corp. (“Western”) and its Milestone Potash Project (the “Project”)
located in the southeast of Regina, Saskatchewan.
Upon completion of the Investment on September
8, 2022, the Subscription Agreement granted each of Vantage and the
Company the right to exercise an option (the “Conversion Option”),
subject to acceptance by the Company (where the Option is exercised
by Vantage) or by Vantage (where the Option is exercised by the
Company), as applicable, and the fulfillment of certain other
conditions (including approval by the Toronto Stock Exchange and
approval by the shareholders of WRX), to exchange all of the WPHC
Shares held by Vantage into WRX Shares. The Option is exercisable
by WRX or Vantage within 180 days of the closing of the
Investment.
Vantage is at arm's length with the Company.
Vantage owned no WRX Shares prior to the conversion and upon
exercise of the Conversion Option and the satisfaction of
conditions for completing the Option exercise, Vantage will obtain
ownership and control over 219,726,258 WRX Shares, representing
116.4% of the total issued and outstanding WRX Shares on a
pre-transaction, non-diluted basis. The issue price is
approximately $0.3641 per WRX Share, a 55.93% premium to the market
price as of September 8, 2022, which was $0.2335.
The exercise of Conversion Option will make
Vantage a new control person and materially affect control of the
Company. WRX Shares owned by Vantage will represent 53.79% of the
issued and outstanding WRX Shares calculated on a post-transaction,
non-diluted basis. Tairui Mining Inc. ("Tairui"), which
owns105,854,938 WRX Shares, representing approximately 56.08% of
the issued and outstanding WRX Shares pre-conversion, will be
diluted to approximately 25.91% post-conversion.
The conversion and issuance of WRX Shares to
Vantage requires TSX approval pursuant to Section 602(a) of the TSX
Company Manual.
Pursuant to Section 611(c) of the TSX Company
Manual, security holder approval will be required in those
instances where the number of securities issued or issuable in
payment of the purchase price for an acquisition (including
securities, in this case, the WPHC Shares) exceeds 25% of the
number of securities of the listed issuer which are outstanding, on
a non-diluted basis. In addition, pursuant to Section 604(a)(i),
TSX will generally require security holder approval as a condition
of acceptance of a notice under Section 602 if the transaction
materially affects control of the listed issuer.
The Company is relying on an exemption from
holding a meeting of shareholders as its majority shareholder
Tairui will provide a written consent, pursuant to Section 604(d)
of the TSX Company Manual. Tairui is familiar with the terms of the
Subscription Agreement and the Conversion Option and is in favour
of it.
Western Resources Corp. Chairman and
CEO, Mr. Bill Xue said, “First of all, I would like to
express my sincere thanks to Vantage for its confidence in the
Project and the future of the Company. I think the most important
value of the exercise of the Conversion Option is to allow Western
Resources Corp. to regain its 100% ownership of Western and the
Project from its current 46% shareholding, which, I believe, is
what all shareholders are expecting. With the entirety of Vantage’s
$80 million equity funding pouring into Western along with the
conversion, the Project will have a more solid financial assurance.
As this Project has attracted some of the best solution mining
experts in the world working on one of the most
environmental-friendly potash mines in the world, I have strong
confidence that our team will be able to deliver a successful
project on time and on budget. The success of the Project serves
the best interest of all shareholders of the Company.”
ON BEHALF OF THE BOARD OF DIRECTORS
Bill XueChairman and CEO
Cautions Regarding Forward-Looking Statements
Certain statements contained in this news
release constitute forward-looking information within the meaning
of applicable Canadian securities laws. Forward-looking statements
are statements that are not historical facts and are generally, but
not always, identified by words such as "anticipate", "continue",
"estimate", "expect", "expected", "intend", "may", "will",
"project", "plan", "should", "believe" and similar expressions
(including negative variations), or that events or conditions
"will", "would", "may", "could" or "should" occur. Forward-looking
statements are based on the opinions and estimates of management as
of the date such statements are made and they are subject to known
and unknown risks, uncertainties and other factors that may cause
the actual results of the Company to be materially different from
those expressed or implied by such forward-looking statements or
forward-looking information. Although management of the Company has
attempted to identify important factors that could cause actual
results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. 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 information. The Company
does not undertake to update any forward-looking information that
is set out herein, except in accordance with applicable securities
laws.
For more information on the contents of this
release please contact Simon Guo, Corporate Secretary, at
306-924-9378.
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