Pacific Asia China Energy Inc. to Be Acquired by Green Dragon Gas for Approximately CDN$35.18 Million
March 27 2008 - 12:58PM
Marketwired
KELOWNA, BRITISH COLUMBIA (TSX VENTURE: PCE) today announced
that it has entered into an Arrangement Agreement with a Green
Dragon Gas wholly owned subsidiary, Greka China Ltd. ("Greka")
under which Greka, through a wholly-owned British Columbia
subsidiary, will acquire all of the Company's outstanding shares at
a price of $0.38 per share in cash (the "Transaction"). The total
value of the Transaction is approximately CDN$35.18 million.
This all-cash Transaction for 100 percent of the Company's
shares represents an approximate 60% premium to the Company's last
traded date on the TSX Venture Exchange, Thursday, March 20,
2008.
The Transaction has been unanimously approved by the Company's
Board of Directors. The Company's Board of Directors has also
resolved to recommend to shareholders that they vote in favour of
the Transaction. In determining to recommend the Transaction to the
Company's shareholders, the Board of Directors considered a number
of factors and engaged Haywood Securities Inc. ("Haywood") to
prepare a fairness opinion in relation to the Transaction. Haywood
has provided a fairness opinion to the Board of Directors of PACE
indicating that, subject to its review of all formal documentation
and subject to the assumptions and conditions set forth in such
opinion, the consideration to be received by PACE shareholders is
fair from a financial point of view.
About the Transaction
The Transaction will be carried out by way of a statutory plan
of arrangement under Section 288 of the Business Corporations Act
(British Columbia), and must be approved by the applicable court
and by 66 2/3 percent of the votes cast by holders of the Company's
shares. All warrants and options of the Company are to be cancelled
under the plan of arrangement and the arrangement is also subject
to 66 2/3 of votes cast by all holders of warrants, options and
shares voting as a single class. The completion of the Transaction
is also subject to customary closing conditions, including
regulatory approvals and completion of satisfactory due diligence.
The Transaction is expected to close on May 23, 2008, shortly after
receipt of shareholder and court approvals.
Details regarding these and other terms of the Transaction are
set out in the Arrangement Agreement, which will be filed by the
Company on SEDAR and will be available on the SEDAR website at
www.sedar.com. Further information regarding the Transaction will
be contained in a proxy circular that the Company will mail to
holders of its common shares in connection with the special meeting
of shareholders to be held to approve the Transaction. It is
expected that these materials will be mailed in late April 2008 for
a meeting to be held in late May 2008. Once mailed, the proxy
circular will be available at www.sedar.com. All shareholders are
urged to read the proxy circular once it is available.
Shareholder Support Agreements
The Company's directors and officers, who collectively hold
approximately 25 percent of the outstanding common shares of the
Company, have entered into lock up agreements with Greka to vote
their shares in favour of the Transaction, subject to their ability
to withdraw such support in the event that the Arrangement
Agreement is terminated.
Financial and Legal Advisors
Haywood Securities Inc. is acting as financial advisor to the
Company with respect to the Transaction. The Company's legal
advisor is Blake, Cassels & Graydon LLP.
Green Dragon Gas
Green Dragon Gas (GDG.L) is a vertically integrated gas supplier
committed to providing optimum shareholder returns through the
execution of an environmentally progressive niche business plan.
Green Dragon's wholly owned subsidiary, Greka China Ltd. (Greka),
is a gas supplier based in China with a focus on the exploration,
development, production, distribution and sales of natural gas from
coal seams, commonly known as coal bed methane or CBM. It expects
to generate its own CBM supply from three projects in Shanxi
province, one project in Jiangxi province and one project in Anhui
province covering acreage holdings with an aggregate area of
6620km3 and an estimated 18.1 Tcf of GIP in aggregate. Greka
expects to distribute the CBM production in these projects to its
customers mainly in the form of CNG by trucks and to a lesser
extent, via pipelines in the form of PNG.
About the Company
PACIFIC ASIA CHINA ENERGY INC. is a Canadian based resource
company specializing in the strategic development of Coal Bed
Methane projects in China, CBM drilling and coal degasification
through its 50% owned subsidiary, PACE MITCHELL DRILLING CORP.
Common Shares of PACIFIC ASIA CHINA ENERGY INC. are listed on the
TSX Venture Exchange under the symbol "PCE".
Forward-Looking Information
This press release contains "forward-looking information" that
is based on the Company's current expectations, estimates,
forecasts and projections. This forward-looking information
includes, among other things, statements with respect to the
potential acquisition of the Company by Greka, the value of the
Transaction, the meeting of the Company's securityholders to
consider the Transaction and the approval of the Transaction by the
Company's shareholders, as well as the Company's plans, outlook and
business strategy. The words "may", "would", "could", "should",
"will", "likely", "expect," "anticipate," "intend", "estimate",
"plan", "forecast", "project" and "believe" or other similar words
and phrases are intended to identify forward-looking
information.
Forward-looking information is subject to known and unknown
risks, uncertainties and other factors that may cause the Company's
actual results, level of activity, performance or achievements to
be materially different from those expressed or implied by such
forward-looking information. Such factors include, but are not
limited to: uncertainties related to the ability of the Company and
Greka to satisfy the closing conditions to the Transaction, the
outcome of the vote by the Company's securityholders and the
decision of the court.
This list is not exhaustive of the factors that may affect our
forward-looking information. These and other factors should be
considered carefully and readers should not place undue reliance on
such forward-looking information. The Company disclaims any
intention or obligation to update or revise forward-looking
information, whether as a result of new information, future events
or otherwise.
ON BEHALF OF THE BOARD
Devinder Randhawa, Chairman & CEO
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this news
release.
Contacts: Pacific Asia China Energy Inc. Craig Christy Investor
Relations 1-877-979-7028 Email: info@pace-energy.com Website:
www.pace-energy.com
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