|By Marketwired .||
|October 21, 2013 08:48 AM EDT||
TORONTO, ONTARIO -- (Marketwired) -- 10/21/13 -- Red Crescent Resources Limited (TSX:RCB)(FRANKFURT:7RC) ("RCR" or the "Company"), a base metals focused mineral exploration and mine development company with operations in Turkey, is pleased to announce that it has entered into a letter of intent (the "Letter of Intent") with Ebullio Commodities Limited dated October 18, 2013, for Ebullio Commodities Limited or one of its affiliates ("Ebullio") to acquire (the "Proposed Transaction") substantially all of the assets of the Company and its subsidiaries, subject to various conditions being satisfied or waived by Ebullio. Ebullio, which is based in London, England, was established in 2007 and manages a range of funds focused on commodities and natural resources.
The Company intends to be voluntarily liquidated or wound up as soon as practicable after the assets are transferred to Ebullio. Following completion of the voluntary liquidation or winding up, the Company plans to delist from the Toronto Stock Exchange and will apply to cease being a Canadian reporting issuer.
Further information about the Proposed Transaction will be disclosed in the information circular to be prepared in connection with the Company's shareholder meeting to approve the Proposed Transaction. The Company expects the due diligence process to take several weeks, however all parties are working on finalizing a definitive agreement as soon as practical, with closing and the voluntary liquidation/wind-up to occur prior to March 31, 2014.
Pursuant to the Letter of Intent the consideration payable by Ebullio to the Company will be (i) USD500,000 in cash; and (ii) special shares (the "Consideration Shares") in the capital of Ebullio equivalent to USD9,500,0000. The Consideration Shares would be distributed to the Company's shareholders and would carry a guaranteed 10% per annum dividend (which would be payable to shareholders in four equal installments throughout the year) and each Consideration Share would be redeemable at the election of the shareholder for cash on or after December 1, 2017. Ebullio would also settle outstanding debts of the RCR group of companies up to a limit agreed to by the parties.
The parties obligations are subject to the satisfaction of certain conditions precedent, including, but not limited to:
1. the completion of a detailed legal, financial and commercial due diligence investigation of the assets of the Company and its subsidiaries by Ebullio; 2. the negotiation and entering into of a definitive purchase agreement; 3. the members of the board of directors of the Company unanimously recommending the Proposed Transaction; 4. the entering into of undertakings by significant shareholders and all the officers and directors of the Company which undertakings would include an agreement of the signatories not to dispose of their shares and to vote in favor of the Proposed Transaction at a meeting of the Company's shareholders; 5. shareholder approval to be obtained at a meeting called for the purposed of approving the Proposed Transaction; and 6. the approval of the Toronto Stock Exchange (the "TSX") and the receipt of all other necessary additional consents and regulatory approvals.
Red Crescent Resources Limited