TORONTO, le 13 mars 2012 /PRNewswire/ - Spara Acquisition One Corp. ("SAO") (TSXV: SAO.P) announced today that it has entered into a non-binding letter of intent with STE (Clean Recycling and Energy) plc ("STE") which outlines the general terms and conditions of a proposed transaction pursuant to which SAO would acquire all of the issued and outstanding shares of STE in exchange for common shares of SAO (the "Transaction"). The LOI was negotiated at arm's length and is effective as of March 9, 2012.
SAO is a Capital Pool Company listed on the TSX Venture Exchange (the "TSXV"). SAO has not commenced commercial operations and has no assets other than cash. The Transaction, if completed, will constitute SAO's "Qualifying Transaction", as defined in TSXV policies.
STE is a Jersey, Channel Islands domiciled company, with a 100% owned UK based waste management business focused on recycling and green energy operating under the trade name Sterecycle®. STE was incorporated on March 1, 2010 as part of a corporate reorganization to prepare Sterecycle (Rotherham) Ltd., an English domiciled Company, which was incorporated on March 12, 2002, for a public listing. STE has its own patented technologies that are capable of recycling and recovering over 80% of the typical household waste stream using a series of processes formed around autoclaving technology. The Sterecycle® process allows recovery of metals, plastics and a number of other recyclable materials and produces a clean, free flowing, biomass rich product called Sterefibre® which can be used in soil remediation, as a fertiliser, as a feedstock for biomass power generation and in anaerobic digestion. STE's business model is to build, own and operate waste recycling plants, diverting residual waste from landfill. It is backed by blue chip investors including Fidelity International, Impax Asset Management and Aston Hill Financial. The only control person of STE as of the date hereof is Duncan Grierson, a resident of the United Kingdom. Mr. Grierson was one of the co-founders of the business and was previously a corporate finance lawyer with Clifford Chance in London and Vice-President at Lake Capital.
The transaction terms outlined in the LOI are non-binding on the parties and the LOI is expected to be superseded by a definitive merger, amalgamation or share exchange agreement (the "Definitive Agreement") to be signed between the parties. The Transaction is subject to requisite regulatory approval, including the approval of the TSXV and standard closing conditions, including the approval of the Definitive Agreement by the directors of each of SAO and STE and completion of due diligence investigations to the satisfaction of each of SAO and STE, as well as the conditions described below. The legal structure for the Transaction will be determined after the parties have considered all applicable tax, securities law, and accounting efficiencies.
Trading in the common shares of SAO is halted at present. It is unlikely that the common shares of SAO will resume trading until the Transaction is completed and approved by the TSXV.
The Proposed Transaction
As of the date hereof, SAO has 17,000,000 common shares, options to acquire an aggregate of 1,700,000 common shares at an exercise price of $0.10 per common share and an agent option to acquire 700,000 common shares at an exercise price of $0.10 per common share. The LOI contemplates a pre-closing consolidation of the SAO common shares (the "Consolidation") at a ratio between 29.75:1 and 19.83:1. The exact Consolidation ratio will be determined prior to closing based on the negotiated terms of the Definitive Agreement. Upon completion of the Consolidation but prior to closing of the Transaction, depending on the ultimate Consolidation ratio SAO is expected to have between 571,428 and 857,143 common shares outstanding. The number of common shares issuable on exercise of the outstanding options and the exercise price associated with such options will be adjusted according to the same ratio.
It is currently proposed that SAO issue a total of 25,142,857 post Consolidation SAO common shares in exchange for all of the issued and outstanding shares of STE. Based on the foregoing and prior to giving effect to a private placement to be completed in connection with the Transaction, it is expected that the current holders of SAO common shares will hold between 2.2% and 3.3% of the outstanding common shares of SAO post closing depending on the final Consolidation ratio, with current shareholders of STE holding the balance.
SAO will also issue options to purchase common shares of SAO in exchange for outstanding options to purchase shares of STE. The number of options to be issued and the terms of such options are to be determined and will be announced at a later date.
Conditions to Transaction
Completion of the Transaction is subject to a number of conditions, including but not limited to acceptance by the TSXV and, if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all. Since the Transaction is not a non-arm's length transaction, at this point SAO does not anticipate having to obtain shareholder approval for the Transaction but that remains subject to TSXV confirmation. SAO does expect to hold a special meeting of shareholders to approve certain matters ancillary to the Transaction, including the Consolidation.
Other conditions to completion of the Transaction include:
- Negotiation and execution of a Definitive Agreement in respect of the Transaction.
- Completion of a private placement in at least such minimum amount as may be required to meet TSXV minimum listing requirements involving the issuance of subscription receipts, each of which is ultimately convertible into one SAO common share and one SAO common share purchase warrant. It is currently anticipated that the issue price for subscription receipts will be CDN$3.50 and that the warrants will be exercisable at CDN$4.50 per share for a period of two years following closing subject to a forced expiry if not exercised within 30 days following notice delivered by SAO if the SAO common shares trade at 125% of the warrant exercise price for 20 consecutive days. The exact terms of the private placement remain subject to change in the context of the market.
- Preparation and filing of a filing statement outlining the definitive terms of the Transaction in accordance with the rules of the TSXV.
- Receipt of all requisite regulatory approvals relating to the Transaction, including, without limitation, TSXV approval.
Further details about the proposed transaction and the combined entity will be provided in a comprehensive press release when the parties enter into a Definitive Agreement and in the filing statement to be prepared and filed in respect of the Transaction.
Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
SAO will engage a sponsor in connection with the Transaction if required in accordance with the requirements of the TSXV.
This press release contains forward-looking statements and information based on current expectations. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. Although such statements are based on management's reasonable assumptions, there can be no assurance that the Transaction will occur or that, if the Transaction does occur, it will be completed on the terms described above. Several forward-looking statements are made as of the date hereof and we assume no responsibility to update or revise them to reflect new events or circumstances.
Neither 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 this release.
SOURCE Spara Acquisition One Corp.