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TORONTO, Jan. 27, 2017 /CNW/ - MillenMin Ventures
Inc. (TSX-V:MVM) ("MillenMin") announces that it has entered
into a binding letter agreement dated January 27, 2017 with Bellomonte Investments
Company Limited ("BICL"), a Cayman
Islands company, and with four other investors (the "Four
Investors") to complete to a reverse takeover (the
"Transaction") involving (1) a private placement offering
(the "Control Placement") for common shares and subscription
receipts with BICL and the Four Investors, which on completion will
give BICL control of MillenMin, and (2) an acquisition of
Bellomonte Limited ("BL"), a Cayman Islands company, that controls a 49%
interest in Bellomonte S.A. ("Bellomonte"), a Cuban joint
stock company that plans to construct, develop and operate a golf
resort in Cuba (the "Vend-in
Transaction").
Bellomonte
Currently, BL beneficially owns the 49% interest in
Bellomonte. Cubagolf S.A. ("Cubagolf"), a Cuban
state-owned enterprise, holds the 51% interest in Bellomonte.
The total registered capital of Bellomonte is CUC54,861,176, of
which CUC27,979,200 is to be contributed by Cubagolf through the
injection of the parcel of land for the development of the golf
resort (the "Site") and CUC26,881,976 is to be contributed
by BL in cash. Of the committed capital contribution of BL,
CUC3,000,000 has been contributed by Beijing Enterprises Real
Estate (HK) Limited ("BEREHK"), a British Virgin Islands company and a
wholly-owned subsidiary of Beijing Enterprises Group Real-Estate
Co., Ltd. ("BEGREC") (see "BICL, the New Control Person"
below). The outstanding capital contribution of CUC23,881,976
is expected be contributed by BL at a later date. As part of
the Vend-in Transaction, an advance of US$24
million will be made by shareholder's loan to BL, such
shareholder's loan may be made by MillenMin or by BICL and then
acquired by MillenMin, either way resulting in MillenMin as the
creditor thereunder. BL will hold these funds until the
CUC23,881,976 is required to be contributed to Bellomonte. It
is anticipated that BL will only contribute these funds to
Bellomonte when Cubagolf injects the Site for the Bellomonte
development. BICL will receive no premium or mark-up for
transferring its interest in Bellomonte. BICL and/or BEREHK
will receive cash or MillenMin shares equal in value to the amount
that BICL and/or BEREHK contributed to Bellomonte,
dollar-for-dollar.
BL was incorporated in July 2016. Save for the acquisition
of the 49% equity interest in Bellomonte, BL has not incurred any
material profit and loss items. Based on the management
accounts, the unaudited net assets of BL and Bellomonte amounted to
approximately US$2,954,615 as at
June 30, 2016. The share of
loss of approximately US$45,385
mainly represents the expenses incurred in the initial
incorporation.
The Site is situated in Havana,
the capital of Cuba, 26 kilometres
away from the city centre. The Site occupies an area of
approximately 3,362,200 square metres (consisting of 2,392,200
square metres under a land use right of fifty years and 970,000
square metres of freehold land) with a plan to develop and operate
a golf resort that will include hotels and resorts for rental
purposes and high-end residential and commercial properties for
sale purposes. BICL plans to cooperate with an
internationally known hotel group to develop and operate the golf
resort project.
The funding of the Project will be financed by the registered
capital (including future capital raises by BL), bank loans and
sales proceed of properties.
After an embargo of a half-century, the United States of America officially
restored diplomatic relationships with Cuba on July 20,
2015. It is generally believed this change will create ample
business opportunities to foreign investors and telecommunication
and tourism industries are expected to benefit. Presently,
JetBlue Airways has established direct flights from New York to Havana. Carnival Corp is
about to launch a cruise line from Miami to Havana for travelling. According to the
statistics of American Society of Travel Agents, once the U.S.
government lifts its ban on leisure travel to Cuba, there will be two million Americans
making their way to Cuba each
year. So far, there is a shortage of quality hotels in
Cuba.
Detailed disclosure on Bellomonte is expected to be set out in a
Filing Statement to be filed with the TSX Venture Exchange and on
SEDAR as part of the Vend-in Transaction phase.
BICL, the New Control Person
Prior to the completion of the Vend-in Transaction, the 49%
interest in Bellomonte will be held by BEGREC in trust for
BL. Currently, BL is a wholly-owned subsidiary of BEREHK and
if it completes a transfer of BL to BICL, such transfer would be
subject to approvals by minority shareholders of its parent
company, Beijing Properties (Holdings) Limited ("BPHL") and
The Stock Exchange of Hong Kong. BICL is itself a
wholly-owned subsidiary of BPHL. BEGREC is wholly-owned by
the Beijing Enterprises Group Company Limited (the "BE
Group"), which is the controlling shareholder of BPHL.
BPHL is 67% held, directly and indirectly, by the BE Group through
BEGREC and other subsidiaries. The BE Group is wholly-owned
by the Beijing Municipal Government and is supervised by the
Beijing State-Owned Assets Supervision and Administration
Commission of the Beijing Municipality. BPHL is a
Bermuda company and listed on the
Stock Exchange of Hong Kong Limited (stock code: 925) and is
principally engaged in investment in, development and operation of
logistics, commercial, residential and industrial properties,
provision of logistics services, including leasing of warehouse
facilities and provision of related management services.
The Transaction agreed to by the parties (1) does not involve
any Related Party (as defined under Multilateral Instrument 61-101
– Protection of Minority Security Holders in Special
Transactions ("MI 61-101"), (2) is not a Related Party
Transaction (as defined under MI 61-101 or the TSX Venture Exchange
policies), and (3) constitutes an Arm's Length Transaction (as
defined under the TSX Venture Exchange policies).
The Control Placement Phase
MillenMin has agreed to enter into an agreement with BICL and
the Four Investors to complete: (1) a private placement of
37,630,000 common shares at a price of CAN$0.10 per share expected
to be paid in United States
currency for gross proceeds of US$2,854,000, and (2) a private placement of
309,399,162 subscription receipts (the "Subscription
Receipts") at a price of CAN$0.10 per subscription receipt
expected to be paid in United
States currency for gross proceeds of US$23,465,997. Each Subscription Receipt
will be exchanged for one common share of MillenMin on completion
of the Vend-in Transaction. The prices for the shares and
Subscription Receipts are expected to be paid in US currency based
on an exchange rate of CAN$1:US$0.758437618. All of the subscription
proceeds from the private placement of Subscription Receipts will
be held in escrow until all conditions precedent to completing the
Vend-in Transaction have been satisfied, the common shares have
been conditionally approved for listing on the TSX Venture
Exchange, the receipt of all regulatory, shareholder and
third-party approvals, if any, required in connection with the
Vend-in Transaction and the private placement, and MillenMin is not
in breach or default of any of its covenants or obligations under
the private placement. If such escrow release conditions are
not satisfied by August 31, 2017, the
subscription proceeds will be used to repurchase the Subscription
Receipts for cancellation at a repurchase price per Subscription
Receipt that is equal to the purchase price, as well, a pro rata
share of any interest actually earned thereon (less any withholding
tax required to be withheld) will be paid to the subscriber.
The reader should note that the common shares of MillenMin
referenced in this news release are on a pre-consolidated basis,
that is, prior to the four-for-one consolidation of the common
shares that was approved by MillenMin's shareholders on
June 21, 2016, but has not been
implemented by the MillenMin board of directors.
On completion of the private placement of the common shares,
BICL and the Four Investors will together hold approximately 70% of
MillenMin. BICL is expected to hold approximately 49% of
MillenMin and become a "Control Person" and the Four Investors will
each hold between 2.8% and 8.4% of MillenMin. MillenMin also
agrees to enter into investor rights agreements (the "Investor
Rights Agreements") with each of BICL and the Four Investors as
described below. BICL and the Four Investors will also agree
to support the Vend-in Transaction.
The Control Placement phase of the Transaction will involve the
following:
- Completing a private placement of 37,630,000 common shares at a
price of CAN$0.10 per share expected to be paid in United States currency for gross proceeds of
US$2,854,000;
- Completing a private placement of 309,399,162 subscription
receipts at a price of CAN$0.10 per subscription receipt expected
to be paid in United States
currency for gross proceeds of US$23,465,997; each subscription receipt will be
exchanged for one common share of MillenMin on completion of the
Vend-in Transaction phase of the Transaction;
- Entering into an agreement with each of BICL and the Four
Investors as to certain rights, which may include, without
limitation, pre-emptive rights, director nomination rights,
prospectus demand rights and information rights; it is expected
that only BICL and one of the Four Investors will each have, but
not until the size of the MillenMin board of directors has been
increased to at least six members, the right to nominate directors;
BICL would have the right to nominate four directors and one of the
Four Investors would have the right to nominate one director;
- Entering into an agreement for the Vend-in Transaction (the
"Vend-in Agreement");
- Obtaining greater than 50% majority shareholder approval by
written consent for the Control Placement (which will create a new
Control Person) based on a preliminary Filing Statement to be filed
on SEDAR that will include disclosure with respect to the Control
Placement and the agreement for the Vend-in Transaction. The
preliminary Filing Statement will be supplemented subsequently at
the Vend-in Transaction phase with a final Filing Statement to be
filed on SEDAR that will include disclosure on the Vend-in
Transaction;
- Changing the MillenMin board of directors in which one or more
of the current directors will be replaced by nominees approved by
BICL. It is expected that such directors will resign and will be
replaced with appointments by the board and an additional fifth
director will also be appointed by the board;
- Changing the MillenMin management in that the officers will be
replaced by appointees approved by BICL;
- If required by the TSX Venture Exchange, providing an
undertaking to meet listing requirements within six months after
the completion of the Control Placement;
- If required by the TSX Venture Exchange, entering into a
pooling or escrow agreement with each of MillenMin's directors,
officers and insiders who hold common shares of MillenMin pursuant
to which the trading of their respective MillenMin common shares
will be restricted until completion of the Vend-in Agreement;
and
- If required by the TSX Venture Exchange, on completion of the
Control Placement, entering into a pooling or escrow agreement with
BICL and each of the Four Investors pursuant to which the trading
of their respective MillenMin common shares will be restricted on
the terms and conditions as required by the Exchange.
See "Additional Control Placement Phase Details" for further
information on the Control Placement phase.
The Vend-in Transaction Phase
MillenMin has also agreed to enter into the Vend-in Agreement to
acquire BL from either BICL or BEREHK, and thereby acquire the 49%
interest in Bellomonte. If BL has been transferred from
BEREHK to BICL, then for the acquisition of BL, MillenMin would
issue MillenMin common shares (at a price of CAN$0.10) valued at
US$27 million to BICL for BICL's
US$3 million equity in BL and the
US$24 million shareholder's loan from
BICL to BL. Alternatively, if BL has not been transferred
from BEREHK to BICL, then BICL would further invest in MillenMin
common shares (at a price of CAN$0.10) valued at US$27 million, and for the acquisition of BL,
MillenMin would pay US$3 million
directly to BEREHK, and MillenMin would also advance US$24 million by shareholder's loan to BL.
On completion of the Vend-in Transaction, the Subscription Receipts
will also be exchanged for common shares such that BICL and the
Four Investors will together hold approximately 98% of
MillenMin. BICL will hold approximately 65% of MillenMin and
the Four Investors will each hold between 3% and 11% of
MillenMin.
As part of the Vend-in Transaction, based on the 49% joint
venture interest in Bellomonte, MillenMin expects to apply to be
listed as a Tier 1 issuer on the TSX Venture Exchange under the
real estate industry segment. Prior to completing the Control
Placement, MillenMin will seek comfort from the TSX Venture
Exchange that its proposed 49% joint venture interest is sufficient
to constitute a "Significant Interest" in real property.
The Vend-in Transaction phase of the Transaction will involve
the following:
- Possibly continuing MillenMin from Canada to the Cayman
Islands (or another offshore jurisdiction);
- Possibly completing a share consolidation either on the basis
of the four-for-one share consolidation that was approved by
MillenMin's shareholders on June 21,
2016 or on the basis of a consolidation ratio to be
determined and approved by MillenMin's shareholders;
- Completing a name change of MillenMin to a name to be
determined;
- Obtaining shareholder approval at a shareholders' meeting for
the possible continuation, the possible share consolidation, and
the name change based on an information circular;
- Obtaining greater than 50% majority shareholder approval by
written consent for the Vend-in Transaction based on a final Filing
Statement that will include disclosure on the Vend-in Transaction,
as well as information concerning BL and the resulting issuer, with
financial statements;
- Subject to Exchange acceptance, completing the acquisition of
the 49% joint venture interest in Bellomonte pursuant to the
Vend-in Agreement;
- Subject to the completion of the Vend-in Agreement, completing
the automatic exchange of subscription receipts for common shares;
and
- If required by the TSX Venture Exchange, completing a brokered
private placement of approximately CAN$1 million to address any
issues relating to a "tight float".
See "Additional Vend-in Transaction Phase Details" for further
information on the Vend-in Transaction phase.
The completion of the Transaction is subject to a number of
conditions, including but not limited to, contractual conditions,
TSX Venture Exchange acceptance and applicable shareholder
approvals (including, but not limited to, for the Control Placement
phase, approval of the shareholders of MillenMin, and for the
Vend-in Transaction phase, if required for the transfer of BL to
BICL, the approval of the minority shareholder of BPHL). It
is anticipated that the approval of the shareholders of MillenMin
will be obtained by written consent, including from shareholders
who have agreed to support the Transaction. All elements of
the Transaction cannot close until the required shareholder
approvals and applicable regulatory approvals are obtained and
contractual conditions are met or waived. However, provided
that MillenMin shareholder approval is obtained and the contractual
conditions pertaining to the Control Placement have been satisfied,
the Control Placement will close upon the receipt of TSX Venture
Exchange acceptance of the Control Placement. There can be no
assurance that the entire Transaction will be completed as proposed
or at all.
Additional Control Placement Phase Details
Share Capital of MillenMin
MillenMin currently has 16,100,000 common shares issued and
outstanding. MillenMin currently has no outstanding options
to acquire common shares. MillenMin currently has outstanding
warrants held by MillenAsia Resource Inc. to acquire 1,500,000
common shares at an exercise price of CAN$0.40 per share with an
expiry date of May 24, 2017. It
is expected that prior to the completion of the Control Placement,
the outstanding warrants held by MillenAsia Resource Inc. will be
cancelled. After the Control Placement, MillenMin may
possibly consolidate its shares either on the basis of the
four-for-one consolidation basis that was approved by MillenMin's
shareholders on June 21, 2016 or on
the basis of a consolidation ratio to be determined and approved by
MillenMin's shareholders.
Shareholders' Approval
To meet the shareholder approval requirement under the TSX
Venture Exchange policies, MillenMin expects to obtain greater than
50% majority shareholder approval by written consent for the
Control Placement (which will create a new Control Person).
MillenMin intends to prepare and file a preliminary Filing
Statement that will include disclosure on the Control Placement and
the agreement for the Vend-in Transaction. The Filing
Statement will be preliminary due to limited or incomplete
information concerning BL and the resulting issuer being available
at the time of the Control Placement. The preliminary Filing
Statement will be updated for the Vend-in Transaction phase to
include prospectus level disclosure on the Vend-in Transaction.
Board of Directors
The board of directors of MillenMin currently consists of four
members: Dr. Yunkai (Kent)
Cai, Mr. Peiwei Ni, Mr.
John H. Paterson, and Mr.
Shunyi Yao. Upon completion of
the Control Placement, the board of directors of MillenMin is
expected to be reconstituted to comprise of five members consisting
of current directors, Mr. Ni, Mr. Paterson and Mr. Yao, and new
directors, Mr. Xu Qian and Mr. Kin
Wai Siu, subject to the acceptance
of the TSX Venture Exchange and Canadian securities
regulations. At least two of the proposed board members are
expected to be independent directors and/or Canadian
residents. Both Mr. Qian and Mr. Siu are directors of BPHL,
which is listed on The Stock Exchange of Hong Kong Limited.
Mr. Xu Qian is the Chairman, an
executive directors and the Chief Executive Officer of BPHL since
July 2009. Mr. Qian is also the Chairman and an executive
director of BEGREC. Mr. Qian graduated from the Economics and
Management Faculty of the Beijing Industrial University with a
bachelor's degree in economics and has obtained his EMBA degree
from Tsinghua University. Mr. Qian has extensive experience
in mergers and acquisitions, corporate restructuring and financial
management. Mr. Qian is also a director of Brilliant Bright
Holdings Limited, which is a controlling shareholder of BPHL.
Mr. Kin Wai Siu is the President
of BPHL and was previously the Chief Financial Officer, Chief
Operating Officer and Company Secretary. Mr. Siu joined the BE
Group in July 2009. Mr. Siu graduated from the City
University of Hong Kong with a
bachelor's degree in accountancy and is a fellow member of the
Association of Chartered Certified Accountants and the Hong Kong
Institute of Certified Public Accountants and a member of the
Institute of Chartered Accountants in England and Wales. Mr. Siu has extensive
experience in financial management and corporate advisory.
Mr. Siu is also a director of Brilliant Bright Holdings Limited,
which is a controlling shareholder of BPHL and also serves as the
Chief Financial Officer of Beijing Holdings Limited, which is an
associate of BPHL.
Management
Upon completion of the Control Placement, management of
MillenMin is expected to consist of Mr. Kin Wai Siu as Chief Executive Officer; Mr.
Lee Cham Wan as Chief Financial
Officer and Corporate Secretary; and others to be determined by
BICL. A majority of the proposed management is expected to be
non-residents of Canada. Both Mr. Siu and Mr. Wan are
officers of BPHL, which is listed on The Stock Exchange of Hong
Kong Limited.
Mr. Lee Cham Wan is the Chief
Financial Officer of BPHL and was previously the Treasurer of BPHL
since February 2014 and the Chief
Financial Officer of China Logistics Infrastructures (Holdings)
Limited, a subsidiary of BPHL, since October 2013. Mr. Wan
graduated from the Hong Kong Baptist College in 1983 with the
Honours Diploma in Accounting and received a master's degree in
Information Technology from the UK Coventry Polytechnic in
1988. He is a fellow member of the Association of Chartered
Certified Accountants and an associate member of the Hong Kong
Institute of Certified Public Accountants.
Resale Restrictions
It is expected that, in connection with the Control Placement,
the common shares, the subscription receipts and the common shares
issuable under the subscription receipts of MillenMin will be
exempt from registration and prospectus requirements under the
accredited investor, minimum investment amount or other relevant
exemptions under National Instrument 45-106 Prospectus and
Registration Exemptions.
However, the common shares, the subscription receipts, and the
common shares issuable under the subscription receipts will be
restricted from trading until the date that is four months and a
day after the distribution date of the common shares and
subscription receipts. Concurrently, the TSX Venture Exchange
also imposes a concurrent four-month resale restriction on the
common shares and subscription receipts issued to directors,
officers and promoters of MillenMin and to persons holding
securities carrying more than 10% of the voting rights attached to
MillenMin's securities both immediately before and after the
Control Placement, and who have elected or appointed or have the
right to elect or appoint one or more directors or senior officers
of MillenMin (such persons include one of the Four Investors who,
under an investor rights agreement, will have, not until the size
of the MillenMin board of directors has been increased to at least
six members, the right to nominate one director of MillenMin).
Investor Rights Agreement
Under the investor rights agreement, in addition to BICL and one
of the Four Investors having, not until the size of the MillenMin
board of directors has been increased to at least six members, the
right to nominate directors of MillenMin (in which BICL would have
the right to nominate four directors and one of the Four Investors
would have the right to nominate one director), BICL and each of
the Four Investors will also have pre-emptive rights, prospectus
demand rights and information rights. Each of the Four
Investors has also agreed to a standstill and not purchase
additional MillenMin shares or transfer MillenMin shares and to
support the Vend-in Transaction.
Escrowed Shares
If required by the TSX Venture Exchange, on completion of the
Control Placement, BICL and each of the Four Investors may need to
enter into a pooling or escrow agreement pursuant to which the
trading of their respective MillenMin common shares will be
restricted on the terms and conditions as required by the
Exchange. Otherwise, as the pricing for the Control Placement
is expected to be at a premium to the market price, none of the
securities issued or issuable under the Control Placement and held
by BICL and the Four Investors are expected to be placed in
escrow.
Use of Proceeds
The net proceeds of the Control Placement will be used by
MillenMin primarily in furtherance of the Vend-in
Transaction. The proposed use of proceeds is as follows: to
repay the promissory note from BICL, CAN$125,000; to engage
advisors (financial, legal and audit) for the Vend-in Transaction,
CAN$500,000; to engage a professional firm for schematic designs of
the golf resort, CAN$1,500,000; to pay operating and administrative
expenses of the Canadian office, CAN$600,000; and to establish a
Cuban representative office, CAN$300,000. The operating and
administrative expenses of the Canadian office is based on a cost
of CAN$100,000 for six months before the completion of the Vend-in
Transaction. The costs relating to the establishment of the
Cuban representative office includes general expenses as well as
travel and living costs for personnel in Cuba for six months before the completion of
the Vend-in Transaction.
Completion Date
The proposed completion date for the Control Placement is
expected to be in March 2017.
Promissory Note
Prior to the completion of the Control Placement, it is proposed
that MillenMin will borrow from BICL, and BICL will lend to
MillenMin, CAN$125,000, on a non-interest bearing basis, by way of
a promissory note to be repaid on completion of the Control
Placement. This loan will be guaranteed by Mr. Shunyi Yao, the Chairman and Chief Executive
Officer of MillenMin. The proceeds of this loan are for
payment of MillenMin's costs in relation to the Control Placement
and to repay outstanding liabilities.
Additional Vend-in Transaction Phase Details
Transaction Price
Under the Vend-in Transaction, MillenMin will acquire BL.
If BL has been transferred from BEREHK to BICL, then for
MillenMin's acquisition of BL, MillenMin would issue MillenMin
common shares (at a price of CAN$0.10) valued at US$27 million to BICL for BICL's US$3 million equity in BL and the US$24 million shareholder's loan from BICL to
BL. If BL has not been transferred from BEREHK to BICL, then
BICL would further invest in MillenMin common shares (at a price of
CAN$0.10) valued at approximately US$27
million, and for the acquisition of BL, MillenMin would pay
US$3 million directly to BEREHK,
MillenMin would also advance US$24
million by shareholder's loan to BL. BL will hold the
US$24 million until required to be
contributed to Bellomonte. It is anticipated that these funds
will only be contributed to Bellomonte when Cubagolf injects the
Site for development by Bellomonte. MillenMin will not pay
any premium or mark-up for acquiring its interest in
Bellomonte. BICL and/or BEREHK will receive cash or MillenMin
shares equal in value to the amount that BICL and/or BEREHK
contributed to Bellomonte, dollar-for-dollar.
Share Capital of MillenMin
On completion of the Control Placement and prior to completion
of the Vend-in Transaction, MillenMin will have approximately 53.7
million common shares issued and outstanding. After the
completion of the Control Placement and prior to completion of the
Vend-in Transaction, MillenMin may grant to management options to
acquire common shares, but otherwise, MillenMin is not expected to
have any other outstanding options to acquire common shares.
Any share options granted before or after the Vend-in Transaction
will be in accordance with the share option plan and applicable TSX
Venture Exchange policies. On completion of the Control
Placement and prior to completion of the Vend-in Transaction,
MillenMin is not expected to have any outstanding warrants to
acquire common shares.
Acquisition of Bellomonte
For purposes of the Transaction, the parties have preliminarily
valued the 49% interest in Bellomonte to be at approximately
US$27 million.
Under the Vend-in Transaction, MillenMin will acquire BL.
If BL has been transferred from BEREHK to BICL, then for
MillenMin's acquisition of BL, MillenMin would issue MillenMin
355,995,000 common shares (at a price of CAN$0.10) valued at
approximately US$27 million to BICL
for BICL's US$3 million equity in BL
and the US$24 million shareholder's
loan from BICL to BL. Alternatively, if BL has not been
transferred from BEREHK to BICL, then BICL would further subscribe
for 355,995,000 MillenMin common shares (at a price of CAN$0.10)
valued at approximately US$27
million, and for the acquisition of BL, MillenMin would pay
US$3 million directly to BEREHK, and
MillenMin would also advance US$24
million by shareholder's loan to BL.
Upon completion of the Vend-in Transaction, the subscription
receipts issued by MillenMin under the Control Placement will
automatically be exchanged for 309,399,162 common shares of
MillenMin, of which 83,329,162 common shares will be issued to BICL
and approximately 226,070,000 common shares will be issued to the
Four Investors. BICL will then hold such number of common
shares to represent approximately 65% of the issued and outstanding
common shares of MillenMin. Upon completion of the Vend-in
Transaction and the automatic exchange of Subscription Receipts for
common shares, MillenMin is expected to have 719,124,162 common
shares issued and outstanding.
Holding Structure of the Cuban Asset
The parties expect to complete the Vend-in Transaction once BL
legally and beneficially holds the 49% interest in
Bellomonte. If there are delays in procuring approval for a
change in registered ownership, a conventional trust mechanism may
be used.
Upon obtaining Cuban governmental approval for the transfer from
BEGREC to BL of the 49% interest in Bellomonte, the declaration of
trust from BEGREC in favour of BL is expected to be cancelled and
BL (owned and controlled by MillenMin) would then legally and
beneficially hold the 49% interest in Bellomonte.
Bellomonte's Bylaws and Joint Venture Partnership Agreement,
which is akin to a shareholders' agreement, allows MillenMin
(through BL), at both the director and shareholder levels, to
assert control through mechanisms such as the right to approve, or
block, major decisions affecting Bellomonte. For example, at
the shareholder level, the Bylaws provide that agreements and
shareholders' resolutions must be approved by 75% of shareholders
and agreements with respect to fundamental changes must be by
unanimous vote at a shareholders' meeting. At the director
level, the Bylaws provide that BEGREC (the current registered owner
of the joint venture interest) has the right to appoint certain
officers and board decisions are to be made by a simple majority,
thereby requiring the consent of at least one BEGREC (the current
registered owner of the joint venture interest) designate.
The Bylaws also provide that the approval of at least two
directors, one of whom is appointed by each of the joint venture
parties, is required to establish strategic plans or to authorize
the general manager to enter into contracts or to take other steps
in furtherance of board policy.
Share Consolidation, Continuation and Name
Change
Prior to the Vend-in Transaction, MillenMin may complete a share
consolidation either on the basis of the four-for-one share
consolidation that was approved by MillenMin's shareholders on
June 21, 2016 or on the basis of a
consolidation ratio to be determined and approved by MillenMin's
shareholders (the "Share Consolidation") or may not complete
a share consolidation at all.
Prior to the Vend-in Transaction, MillenMin may be required by
BICL to continue from the jurisdiction of Canada to the jurisdiction of the Cayman Islands or another offshore
jurisdiction acceptable to the TSX Venture Exchange (the
"Continuation"). The Continuation will require the
approval of MillenMin shareholders. If MillenMin is to be
continued, the Articles of the offshore company will also need to
be pre-approved by the Exchange.
As part of the Vend-in Transaction, MillenMin will change its
name (the "Name Change"). A name change under the
Canada Business Corporations Act will require the approval
of MillenMin Shareholders. The Name Change will also require
TSX Venture Exchange acceptance.
Shareholders' Approvals
As the proposed Share Consolidation, Continuation and Name
Change require shareholder approval under the Canada Business
Corporations Act, MillenMin intends to seek to obtain
shareholder approval at a shareholders' meeting for the possible
Share Consolidation (if other than the four-for-one share
consolidation that has already been approved by shareholders), for
the possible Continuation and for the Name Change. As such,
MillenMin intends to mail to shareholders and file on SEDAR an
information circular relating to these matters requiring
shareholder approval.
For the Vend-in Transaction, to meet the shareholder approval
requirement under the TSX Venture Exchange policies, MillenMin
expects to obtain greater than 50% majority shareholder approval by
written consent. Although the agreement for the Vend-in
Transaction was entered into prior to the completion of the Control
Placement, BICL and the Four Investors will not participate in the
written consent resolution. MillenMin intends to prepare and
file a final Filing Statement that will include prospectus level
disclosure on the Vend-in Transaction, as well as information
concerning BICL and the resulting issuer. The final Filing
Statement will include the relevant financial statements and pro
forma statements in compliance with TSX Venture Exchange
requirements.
Board of Directors and Management
Upon completion of the Vend-in Transaction, the board of
directors and the management of MillenMin are expected to remain
the same as on completion of the Control Placement. It is
contemplated that, at the next MillenMin shareholders' meeting, the
size of the board will be expanded up to approximately nine
directors, of which it is expected that BICL will have the right to
nominate four of the director nominees and one of the Four
Investors will have the right to nominate one of the director
nominees.
Escrow Considerations
BICL will be subject to a TSX Venture Exchange "Value Security
Escrow Agreement" with respect to the common shares issued to BICL
under the Vend-in Transaction. MillenMin will assign a value
for the purpose of calculating the number of Value Securities based
on the Control Placement, or by a formal valuation to be prepared
by an independent valuator (the "Valuation Report"), or by
Net Tangible Assets (as defined by the TSX Venture Exchange) or by
another method acceptable to the TSX Venture Exchange.
BICL is also expected to provide to the TSX Venture Exchange
with the necessary undertakings not to transfer its respective
securities in the relevant holding companies without the consent of
the TSX Venture Exchange while the Value Security Escrow Agreement
is in effect. In addition, the directors and senior officers
of such holding companies will provide to the TSX Venture Exchange
with undertakings not to permit or authorize any issuance of
securities or transfer of securities that could reasonably result
in a change of control of such holding companies.
In addition, MillenMin is expected to submit to the TSX Venture
Exchange a valuation prepared in support of the value ascribed to
the 49% interest in Bellomonte. However, if no valuation is
prepared, MillenMin may seek confirmation from the Exchange that it
may rely on the concurrent financing or the Net Tangible Assets or
another method to assign value.
Cuban Regulatory Matters
Cuban legal counsel is expected to provide an opinion that,
among other things, the parties have complied with Cuban legal
requirements.
Sponsorship
As the Transaction is subject to sponsorship, as required by the
TSX Venture Exchange, a sponsor will be retained in connection with
the Transaction. A subsequent news release will announce the
sponsor and the terms of sponsorship.
Legal Counsel
For this Transaction, MillenMin is represented by Goodmans LLP
and BICL is represented by McMillan LLP.
Use of Proceeds
The net proceeds of the Vend-in Transaction will primarily be
used to develop and operate the golf resort in Cuba.
Closing Date
The expected closing date for the Vend-in Transaction is in the
third quarter of 2017.
Trading Halt
Trading of the MillenMin shares has been halted on the TSX
Venture Exchange and it is expected that the trading halt will
continue until submissions to the TSX Venture Exchange for the
Vend-in Transaction have been completed to the satisfaction of the
TSX Venture Exchange or until it determines otherwise in its
discretion.
Additional Information
Additional information about MillenMin is available to the
public on SEDAR at www.sedar.com.
The information with respect to Bellomonte, BL, BICL and the
BE Group in this news release has been provided by BICL.
MillenMin does not represent that this information is accurate or
complete.
Completion of the Transaction is subject to a number of
conditions, including but not limited to, contractual conditions,
Exchange acceptance and applicable disinterested shareholder
approvals. The Transaction cannot close until the required
shareholder approvals and applicable regulatory approvals are
obtained and contractual conditions are met or waived. 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 MillenMin Ventures Inc. should be considered highly
speculative.
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 news release.
Neither 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.
Forward-Looking Statements
This news release contains forward-looking statements and
information that are based on the beliefs of management and reflect
MillenMin's current expectations. When used in this news
release, the words "estimate", "project", "belief", "anticipate",
"intend", "expect", "plan", "predict", "may" or "should" and the
negative of these words or such variations thereon or comparable
terminology are intended to identify forward-looking statements and
information. The forward-looking statements and information
in this news release includes information relating to completion of
the Control Placement, the Vend-in Transaction and the
Transaction. The forward-looking information is based on
certain assumptions, which could change materially in the
future. Such statements and information reflect the current
view of MillenMin with respect to risks and uncertainties that may
cause actual results to differ materially from those contemplated
in those forward-looking statements and information. By their
nature, forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause MillenMin's actual
results, performance or achievements, or other future events, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the risk that
MillenMin is unable to complete the Control Placement, the Vend-in
Transaction and the Transaction, as expected or at all, the risk
that the necessary directors, shareholders and regulatory approvals
are not obtained or the Transaction may be terminated prior to
completion, the risks associated with property development and
doing business in Cuba. When relying on MillenMin's
forward-looking statements and information to make decisions,
investors and others should carefully consider the foregoing
factors and other uncertainties and potential events.
MillenMin has assumed a certain progression, which may not be
realized. It has also assumed that the material factors
referred to above will not cause such forward-looking statements
and information to differ materially from actual results or
events. However, the list of these factors is not exhaustive
and is subject to change and there can be no assurance that such
assumptions will reflect the actual outcome of such items or
factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE
REPRESENTS THE EXPECTATIONS OF MILLENMIN AS OF THE DATE OF THIS
NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH
DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON
FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS
INFORMATION AS OF ANY OTHER DATE. WHILE MILLENMIN MAY ELECT
TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY
PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE
LAWS.
SOURCE MillenMin Ventures Inc.