CALGARY, Nov. 29, 2013 /CNW/ - It has come to the
attention of Sonoro Energy Ltd. ("Sonoro" or "the Company") (TSX-V:
SNV) that Amira Industries N.V. ("Amira") has disseminated a news
release (the "Amira News Release") indicating its intention to vote
against Sonoro's proposed private placement (the "Private
Placement") of up to 32,550,000 common shares ("Common Shares") at
the upcoming special meeting of Sonoro on December 5, 2013 called to consider a proposed
consolidation (the "Consolidation") of Sonoro's Common Shares on a
10 for one basis and the Private Placement (the "Sonoro
Meeting").
Sonoro wishes to thank its shareholders for
their support of the Consolidation and Private Placement and urges
shareholders that have not already done so to tender their vote
prior to the proxy deadline of 2:00
p.m., Calgary time, on
December 3, 2013. The completion of
the Consolidation and Private Placement is integral to our
objective of allowing the Company to confirm its rights in Salah ad
Din Province and, ultimately, to commence field operations to
capture the resource opportunity under our License (as defined
below).
The purpose of this news release is to address
misleading statements in the claims made in the Amira News
Release.
| 1. |
Claim: Amira believes that the Proposed Placement is a
value destructive initiative being undertaken by Sonoro, whose main
purpose appears designed to protect the position of both a
controlling shareholder and management at the expense of
shareholders. |
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Response: The Private Placement was selected
following an extensive and proactive consideration of alternatives
involving financial, legal and other advisors as the best means for
addressing Sonoro's immediate and pressing working capital needs.
Additionally, Sonoro notes that under the terms of its license
agreement (the "License") with the Salah ad Din Province and
Amira's subsidiary, Berkeley Petroleum Mesopotamia Asphalts Limited
("Berkeley"), in the event of an insolvency of Sonoro, Berkeley
will have the right to assume Sonoro's rights under the License
such that Amira has a direct financial incentive in Sonoro failing
to address its immediate working capital needs. As a
consequence, all of Amira's claims as well as its vote against the
Private Placement must be considered in the context of its overall
incentives. In July 2013, Sonoro terminated Amira's retainer-based
consultancy agreement (the "Amira Consulting Agreement") for
government liaison and advisory services. Given the significant
delays and lack of progress in obtaining the required approvals,
the Company decided to take more aggressive and direct
actions. Since terminating the Amira Consulting Agreement,
Amira has worked against Sonoro's efforts to obtain the necessary
government approvals. In November 2011, the Company loaned Berkeley
$500,000. Berkeley provided the Company with a promissory
note for the principal amount plus interest. Payment of the
promissory note is overdue and the Company issued to Berkeley a
notice of default and request for immediate payment in July
2013. Sonoro believes that Berkeley's refusal to pay amounts
owing to Sonoro, including repayment of the $500,000 loan, is
indicative of Amira's and Berkeley's actions being contrary to the
best interests of Sonoro. Further, the lack of payment by
Berkeley of amounts owing to Sonoro, coupled with Amira's vote
against the Private Placement, appears to indicate a strategy
designed to weaken rather than strengthen Sonoro's working capital
situation. |
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| 2. |
Claim: The Company unfairly discriminates against
minority shareholders by making the offer for 26.3 million
"Post-Consolidation Shares" ONLY to Geopetrol, who effectively
increase its percentage ownership of shares at an acquisition price
lower than it would have paid on the open market. |
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Response: This claim is an incorrect explanation
of the nature of the transaction. The Private Placement
provides Sonoro necessary liquidity that would not be provided by
open market purchases. Moreover, the Consolidation was
necessary to allow Sonoro to proceed with the Private Placement in
full compliance with the minimum pricing rules of the TSX Venture
Exchange (the "TSX-V"). Sonoro remains receptive to the
participation of other shareholders in the Private Placement,
provided that such participation is in compliance with applicable
securities laws. In fact, as noted below, the Private Placement
allows for the issuance of up to 6,250,000 Common Shares to
subscribers other than Geopetrol. In addition, Sonoro remains
receptive to any superior financing alternative, including from
Amira. |
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| 3. |
Claim: The Proposed Placement is being effected
non-pre-emptively and has therefore been structured in a way that
has the effect of concentrating the control of Geopetrol
International Holding Inc. ("Geopetrol") at the expense of all
other shareholders. |
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Response: As stated above, in determining to
proceed with the Private Placement, Sonoro proactively considered a
number of alternatives. The Consolidation and Private
Placement were selected as the most viable method for addressing
Sonoro's immediate and pressing working capital needs. The
Private Placement involves the issuance of up to 32,550,000 Common
Shares, of which Geopetrol has agreed to subscribe for 26,300,000
Common Shares. The remaining 6,250,000 Common Shares, if
subscribed for, will be issued to subscribers other than Geopetrol.
The issuance of a maximum of 32,550,000 Common Shares under the
Private Placement was determined by Sonoro to represent the maximum
amount of funds that Sonoro could realistically expect to
raise. |
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| 4. |
Claim: If the Proposed Placement is approved, Geopetrol
will increase its current 17.4% holding to 52.4%, at a price 20%
below the market price prior to announcement and dilute the
Company's outstanding share capital by 55%. |
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Response: The Private Placement, while dilutive,
is necessary to address Sonoro's immediate and pressing working
capital needs in order to execute our plan in obtaining the
necessary provincial and federal approvals and commencing
operations. Sonoro proactively considered a number of
alternatives to address these needs and Geopetrol emerged as the
potential subscriber willing to provide the necessary funding on
terms acceptable to Sonoro. The Private Placement pricing is
in fact at a premium to the market price of $0.005 per
pre-Consolidation Common Share prior to the announcement. |
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| 5. |
Claim: We believe that today's standards of good
corporate governance dictate or command that the offer to
participate in the subscription to shares in Sonoro should be open
to all shareholders and not just to Geopetrol. |
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Response: As stated above, Sonoro determined to
proceed with the Private Placement following an extensive and
proactive consideration of alternatives. During this
consideration Sonoro received limited investor interest, with
Geopetrol emerging as the only potential subscriber willing to
provide the necessary funding on terms acceptable to Sonoro. The
decision to proceed with the Private Placement was reached in
consultation with financial advisors. |
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| 6. |
Claim: Further, by approving the private placement
shareholders would be allowing Geopetrol to circumvent certain
investor protections which usually apply to takeover bids under
Canadian securities laws where an investor takes control of greater
than 20% of a company's voting shares. |
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Response: This claim misunderstands the nature of
the transaction. The Private Placement is subject to the
rules of the TSX-V regarding the creation of a new "control person"
and not subject to takeover bid rules, which deal with secondary
purchases of securities rather than issuances from treasury.
The rules of the TSX-V are intended to provide investor protection
by requiring that shareholders approve the creation of a new
"control person". Sonoro is complying fully with these rules
in the context of the Private Placement. |
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| 7. |
Claim: As a result of its current position and insider
status, Geopetrol is privy to information not available to minority
shareholders. There is information asymmetry which will allow
Geopetrol to unfairly benefit from the Proposed
Placing. |
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Response: To the best of the knowledge of Sonoro,
Geopetrol does not have material non-public information regarding
Sonoro. If Geopetrol had material non-public information
regarding Sonoro, applicable Canadian securities laws would
preclude Geopetrol from proceeding with the Private Placement. |
Since terminating the Amira Consulting
Agreement, Amira has not offered any new solutions or ideas
relating to obtaining the necessary government approvals.
Sonoro has directly established positive lines
of communications with various provincial and federal officials and
believes it has a way forward to obtain the necessary approvals
that could be supported both provincially and federally. Sonoro's
view is that a sustainable solution is only possible with the
coordination and collaboration of both provincial and federal
governments.
Sonoro asks shareholders to consider all of
Amira's claims as well as its vote against the Private Placement in
the context of Amira's overall incentives and urges shareholders to
vote in favour of the Private Placement. After an extensive and
proactive consideration of alternatives involving financial, legal
and other advisors, Sonoro and its advisors determined that the
Private Placement is the only viable option for Sonoro to raise the
capital necessary to allow it to pursue its business plan. As
stated above, Sonoro remains receptive to the participation of
other shareholders in the Private Placement, provided that such
participation is in compliance with applicable securities laws.
About Sonoro
Sonoro is an international company focused on
unconventional bitumen resource exploration and development.
Our current focus is a pure play on asphalt/bitumen resource
exploration and development in Iraq. Sonoro has initiated the
evaluation of resource opportunities under our asphalt license
agreement in the Salah ad Din Province.
Forward-Looking Information
Certain statements in this news release may
constitute "forward-looking information" ("forward-looking
statements") within the meaning of applicable Canadian securities
laws. Forward-looking statements are often, but not always,
identified by the use of words such as "anticipate", "plan",
"intend", "estimate", "potential", "could", "ongoing",
"prospective", "expected" and similar words suggesting future
outcomes. By their nature, forward-looking statements are based on
current expectations regarding future events that involve a number
of assumptions, known and unknown risks, and uncertainties and
other factors that may cause the actual results, performance or
achievements of Sonoro, or the industry, to differ materially from
the anticipated results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include,
but are not limited to, expectations and assumptions concerning the
timing and anticipated receipt of required regulatory and
shareholder approvals for the Consolidation and Private Placement;
the ability of Sonoro and Geopetrol to satisfy the other conditions
of the Subscription Agreement and to complete the Private
Placement; and the estimated timing of the completion of the
Consolidation and the closing of the Private Placement.
Given these uncertainties, you should not rely
on forward-looking statements. These forward-looking statements
also represent our estimates and assumptions only as of the date
that they initially were made. We expressly disclaim a duty to
provide updates to any forward-looking statements, and the
estimates and assumptions associated with them, to reflect events
or circumstances or changes in expectations or the occurrence of
anticipated events after the date they initially were made, except
and to the extend required by applicable law.
Neither the TSX Venture Exchange nor its
Regulation Service Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
SOURCE Sonoro Energy Ltd.
