Pacific Asia China Energy Inc. to Be Acquired by GREKA China Ltd. for Approximately $32.40 Million
May 20 2008 - 9:48AM
Marketwired
KELOWNA, BRITISH COLUMBIA (TSX VENTURE: PCE) today announced
that it has entered into an agreement (the "Amendment Agreement")
with GREKA China Ltd. ("GREKA") to amend the Arrangement Agreement
made as of March 27, 2008 among GREKA, GREKA Acquisitions Ltd.
("Acquisitionco") and the Company pursuant to which GREKA, through
Acquisitionco, its wholly-owned British Columbia subsidiary, will
acquire all of the Company's outstanding shares. Under the
Amendment Agreement, shareholders will receive $0.35 per share in
consideration for the sale of their shares to GREKA - rather than
the originally offered price of $0.38. The total value of the
transaction is approximately $32.40 million. The adjustment in the
purchase price was due to pertinent findings during GREKA's due
diligence.
The amendment and the Amendment Agreement have been approved by
a majority of the Company's Board of Directors. A majority of the
Company's Board of Directors has also resolved to recommend to
shareholders that they vote in favour of the transaction, subject
to the receipt by the Board of Directors of an opinion from the
Company's financial advisor, Haywood Securities Inc., that the
consideration to be received by the Company's shareholders is fair
from a financial point of view, subject to the assumptions and
conditions set forth in such opinion.
About the Transaction
The structure of the transaction remains unchanged by the
Amendment Agreement. 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.
Completion of the transaction is subject to customary closing
conditions and is expected to occur during the third quarter 2008,
shortly after receipt of shareholder and court approvals. The due
diligence condition in favour of GREKA has now been removed.
Details regarding these and other terms of the transaction are
set out in the Arrangement Agreement, which was filed by the
Company on the SEDAR website at www.sedar.com, and in the Amendment
Agreement, which will be filed on SEDAR. Further information
regarding the transaction will also 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 early June 2008 for a meeting to be held on or
about July 7, 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
Directors and officers of the Company holding an aggregate of
approximately 11.0 percent of the outstanding common shares of the
Company, have entered into 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,
as amended, 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.
GREKA is Green Dragon's wholly-owned subsidiary. 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 6,620
km3 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 compressed natural gas by trucks and to a
lesser extent, via pipelines in the form of petroleum natural
gas.
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 percent owned subsidiary, Pace Mitchell Drilling
Corp. The common shares of the Company 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 (250) 979-7028 Email: info@pace-energy.com Website:
www.pace-energy.com
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