Americas Petrogas Receives Support for Proposed Sale Transaction From Leading Independent Third Party Advisory Firms and Sends Letter to Shareholders
- Leading independent third party advisory firms, ISS and Glass Lewis, recommend a vote FOR the proposed sale Transaction with Tecpetrol - Americas Petrogas dispels Horizon's unfounded claims, and mails a Letter to Shareholders - Board of directors confirms Transaction is in the best interests of all shareholders
(firmenpresse) - CALGARY, ALBERTA -- (Marketwired) -- 07/14/15 -- Americas Petrogas Inc. ("Americas Petrogas" or the "Company") (TSX VENTURE: BOE) today issued a letter to shareholders confirming the benefits of the acquisition by Tecpetrol International S.A. and Tecpetrol Internacional S.L. (Unipersonal) ("Tecpetrol" or the "Purchasers") of the Company's wholly-owned subsidiary, Americas Petrogas Argentina S.A. ("APASA"), for an aggregate cash purchase price of US$63 million, (approximately CDN $77.6 million) (the "Transaction"); confirming the Board's unanimous recommendation that shareholders should vote FOR the Transaction; and addressing and responding to the public statement issued July 6, 2015 by Horizon Capital Management Inc. ("Horizon") in respect of the Transaction.
LETTER TO SHAREHOLDERS
Dear Americas Petrogas Shareholders:
The Annual and Special Meeting of the Shareholders of Americas Petrogas Inc. (the "Meeting") is scheduled to be held on July 29, 2015 to approve a Transaction pursuant to which Tecpetrol has agreed to acquire all of the issued and outstanding common shares of APASA for an aggregate cash purchase price of US$63 million (approximately CDN $77.6 million), subject to adjustment under the terms of the agreement of purchase and sale between the Company and the Purchasers (the "Sale Agreement"), a copy of which is filed on SEDAR.
Leading Independent Third Party Recommendation
As a further affirmation of the prior and unanimous recommendation of the board of directors (the "Board"), two leading third party advisory firms, Institutional Shareholder Services Inc. ("ISS") and Glass Lewis & Co. ("Glass Lewis"), have recommended a vote FOR the Sale Transaction. ISS and Glass Lewis are advisory firms that, amongst other services, analyze and provide voting recommendations to their subscribers including pension funds, investment managers, mutual funds and other institutional shareholders.
In its analysis, ISS stated that the Transaction will "enable the company to expand its activities on its retained conventional and unconventional properties, such as its retained 89% ownership interest in GrowMax Agricorp". Glass Lewis noted that "the Company's strategic review process leading up to the proposed agreement involved discussions with more than 80 potentially interested parties over a nearly two year period" and that the Board "has negotiated a favorable consideration in the Transaction."
Both firms agree the Transaction represents the consummation of a thorough and lengthy strategic review and sale process, and that the likelihood of a superior proposal in this current marketplace may be limited.
Board of Directors Maintains Unanimous Recommendation for Transaction
The Board continues to unanimously recommend that shareholders of the Company vote FOR the special resolution approving the Transaction and confirms its determination that the Transaction is fair, from a financial point of view, to the Company and its shareholders and that the Transaction continues to be in the best interests of the Company and its shareholders for the following reasons:
The future of your investment is at risk. Your vote on the Transaction will determine the future of Americas Petrogas. If you cannot attend the Meeting, you are encouraged to vote FOR the Transaction by completing the form of proxy sent to you and submitting it as soon as possible.
Please refer to the management information circular of the Company dated June 29, 2015 in respect of the Meeting (the "Circular") for details on how to attend the Meeting or submit a proxy, or call the Company's proxy solicitation agent, Laurel Hill Advisory Group, at 1-877-452-7184 (North American toll free) or 1-416-304-0211 (International collect).
Horizon, a foreign hedge fund with a history of exploiting vulnerable companies with attractive assets, has only recently become a shareholder of Americas Petrogas and has indicated opposition to the Transaction, with objectives that, in the view of the Board and management, may not coincide with the best interests of all shareholders. To assist shareholders in evaluating the merits of the Transaction, management and the Board wish to clarify and correct many of the errors and misrepresentations included in Horizon's recent press release, and expand upon certain information included in the Circular.
The Board and Management are Committed to the Near and Long-Term Interests of All Americas Petrogas Shareholders
Horizon has alleged that the Board is misleading shareholders and that the Board and management have put their short term interests above the long term interests of all shareholders. Horizon has also suggested that Kisan International Trading ("Kisan") has no interest in the oil and gas business and that there is a misalignment between Kisan and the Company's other shareholders. These statements are untrue. On the contrary, the Board, senior management of the Company (who collectively have a significant personal investment in the Company) and Kisan (which made a substantial financial investment in Americas Petrogas in 2009 and further investments in 2010 and 2012) have been long term shareholders, acquired their stock at prices above current market prices, have not sold shares of the Company in the past two years since the commencement of the strategic review and continue to be motivated and committed to add value to the Company for the benefit of all shareholders. On the other hand, to the best of the Company's knowledge, Horizon has held shares in Americas Petrogas for less than six months, has acquired a large number of shares following the June 17, 2015 press release announcing the Transaction, and may well have a short-term, opportunistic view of the Company. As discussed below, Horizon never contacted the Company prior to making its public statement.
Exhaustive attempts by your management and Board to identify and maximize the value of a strategic transaction demonstrate their constant objective to advance the long term interests of shareholders and to maximize shareholder value. While the Board unanimously believes that the Transaction is fair, from a financial point of view, to the Company's shareholders, it is obvious that the Board and management would have preferred a higher purchase price for APASA and its assets absent real-world considerations. However, merely waiting for a better offer to materialize or an oil price recovery to occur, or determining not to take any action whatsoever pending the outcome of the Argentine elections, were options that were not available to the Board and management given the Company's current working capital position and its inability to complete a non-dilutive financing. Moreover, the 22-month long strategic alternatives process conducted by the Company under the leadership of Jefferies LLC, one of the world's pre-eminent marketers of unconventional hydrocarbon assets, disproves Horizon's contentions that (1) there are many willing buyers of APASA and its assets, and (2) the per acre purchase price for the Transaction is below market. Comparisons to one-year-old pricing in North America are irrelevant to market conditions in Argentina. Horizon's statements to the effect that it is not an ideal time in the valuation cycle of the Company to undertake a transaction do not take consideration of the financial realities facing the Company in the immediate future. The fact (which Horizon has overlooked) is that the Company will exhaust its working capital by the end of Q3 2015 and, without additional cash, will not be able to continue its operations thereafter. This could result in the eventual loss of all of the Company's assets and the loss by shareholders of the value of their entire investment. Horizon's assertion that the Company should stay the course "until the conditions in Argentina and the global oil and gas market improve, which could be as soon as Q1 2016" entirely ignores the Company's current financial circumstances. Your Board and management is not prepared to gamble with the Company's future in this manner.
The Board and management of Americas Petrogas continue to focus on maximizing near to long-term value for all of its shareholders. The business of Americas Petrogas has not changed - it will continue to focus on the exploration and development of high-impact conventional and non-conventional oil and gas assets in Argentina.
The Transaction will allow the Company to implement a new business plan that focusses on the exploration and development of several core properties, most notably, Vaca Mahuida, Loma Ranqueles and Totoral, Yerba Buena and Bajada Colorada, which management believes have considerable exploration and development upside, near term cash flow prospects and a manageable level of investment capable of being met, given the Company's expected post-Transaction working capital and other financial resources. Under its new business plan, the Board is fully committed to and intends to reduce its G&A costs so as to operate more efficiently and in a manner commensurate with the size of the Company going forward. Additional details regarding the new business plan are provided below.
Horizon Never Contacted Americas Petrogas Prior to its Public Statement
Americas Petrogas respects the view of all shareholders; however, it is clear that many of the comments and allegations raised by Horizon in its public statement are unfounded and have been made without a full understanding of the facts or the benefit of even rudimentary discussions with Americas Petrogas' management. Most importantly, Horizon is clearly unaware of or has purposely ignored the current financial and other circumstances affecting Americas Petrogas. Prior to making its public statement, Horizon never contacted the management or Board of Americas Petrogas to understand the Company's business in Argentina, to ascertain the negotiating efforts or position of the Company, or to provide input or share its concerns.
Even though the Company's strategic alternatives process was well known and highly publicised, Horizon has never offered to introduce Americas Petrogas to the parties it claims have expressed interest in financing the Company or participating in the exploration and development of the Company's assets. Management would have welcomed any constructive outreach from Horizon in this regard.
Shareholders Should Consider the Following Specific Facts and Vote FOR the Transaction
Management and the Board encourage shareholders to carefully consider the following specific facts in evaluating the Transaction:
Offer represents a 46% premium to the closing price and a 75% premium to the 30 day volume weighted average trading price
The Transaction is superior to any other alternative resulting from a 22 month process
Independent Fairness Opinion
The Transaction preserves Americas Petrogas business and allows Americas Petrogas to retain assets with upside potential in Argentina
If the Transaction is not completed, Americas Petrogas has no other alternatives and risks the loss of its entire portfolio of assets
Senior management and the Board of the Company are not being rewarded in connection with the Transaction
Business Plan and Future Path for Americas Petrogas
The closing of the Transaction will enable Americas Petrogas to implement its new business plan. Under its new business plan, the Board is fully committed to and intends to:
YOUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOUR OF THE PROPOSED SALE TRANSACTION. YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY SHARES YOU OWN, AND WILL DETERMINE THE FUTURE FOR AMERICAS PETROGAS INC.
Shareholder Questions
The Company has retained Laurel Hill Advisory Group as proxy solicitation agent for the upcoming Meeting for fees of approximately $30,000 for the proxy solicitation service in addition to certain out-of-pocket expenses. Laurel Hill Advisory Group will also be entitled to a fee of $50,000 should the Transaction be approved by Company shareholders at the Meeting. In accordance with the Sale Agreement, the costs of Laurel Hill Advisory Group will be borne equally by the Company and the Purchasers.
Shareholders with questions or requiring voting assistance may contact the Company's proxy solicitation agent:
Forward Looking Information
Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian securities laws. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact and should be viewed as "forward-looking statements". There are "forward-looking statements" included in this press release that relate to the benefits of the Transaction and description of the business of the Company following the Transaction, the upside potential of the Company's assets, development of an updated business plan, completion of the Transaction, the meeting date and the closing date of the Transaction. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
There can be no assurance that such forward-looking statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release. The forward-looking statements contained herein are expressly qualified by this cautionary statement. In particular, there is no assurance that the conditions set out in the Sale Agreement, including receipt of required shareholder and regulatory approvals, will be satisfied. There is also no assurance that the Transaction will be completed on the timelines indicated or at all. Accordingly, because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.
Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.
NEITHER THE 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 THE RELEASE.
Contacts:
Americas Petrogas Inc.
Barclay Hambrook, P. Eng., MBA
President and CEO
(403) 685-1888
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Datum: 14.07.2015 - 14:33 Uhr
Sprache: Deutsch
News-ID 406708
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contact information:
Town:
CALGARY, ALBERTA
Kategorie:
Farming
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