Symbol: TSX-V: LG
MONTREAL,
Nov. 1, 2017 /CNW Telbec/ - LGC Capital Ltd. (TSXV:
LG) ("LGC") is pleased to announce that it has entered
into a letter of intent with Etea Sicurezza Group Ltd
("Etea Sicurezza") for a potential acquisition of
approximately 20% of Etea Sicurezza by LGC. The letter of intent
will form the basis for the negotiation of a mutually-satisfactory
definitive agreement to be entered into between LGC, on the one
hand, and Etea Sicurezza and its shareholders, on the other hand.
LGC and Etea Sicurezza are at arm's-length.
Based in London, England, Etea
Sicurezza (www.eteasicurezzagroup.com) is a private company which
specializes in fire safety and security by providing products and
services to international companies such as L'Oreal,
Coca Cola, BASF, Doha Metro and others.
Etea Sicurezza was founded in 1998 and is now a global leader
in the field of high-tech safety with offices in seven countries
and agents in 20 countries. Etea Sicurezza operates as an
EPC (Engineering, Procurement and Construction) contractor
implementing safety systems, and provides proprietary and patented
technologies that are customized and fully compliant with
international standards.
"We are very pleased to have signed the letter of intent with
Etea Sicurezza," commented Mazen Haddad, Co-Chairman of
LGC and head of its merchant banking division. "We believe that
Etea Sicurezza is a strong company with great growth potential and
that our proposed transaction will be beneficial for LGC and our
shareholders."
The letter of intent provides that LGC will incorporate a new,
wholly-owned subsidiary corporation ("Holdco") which will issue
11,280,000 shares to LGC; Holdco will acquire 87.5% of the issued
and outstanding shares of Etea Sicurezza from its principal
shareholders in exchange for an aggregate of 45,120,000 Holdco
shares and will acquire the balance of 12.5% of the issued and
outstanding shares of Etea Sicurezza from a minority shareholder
for cash, to be funded by LGC. Holdco will effect a private
placement or other similar financing of 1,200,000 shares at a
price of $0.83333 per share for gross
proceeds of $1 million. The minority Etea Sicurezza
shareholder will undertake to subscribe for common shares of LGC by
way of private placement in an amount equal to the amount it
receives for its 12.5% interest at a price per share equal to the
then-market price of LGC's shares.
The letter of intent provides that at the closing of the
proposed transaction, Holdco will have 60 million shares
issued and outstanding, of which, among others, the current
Etea Sicurezza shareholders will hold an aggregate of
approximately 75%, LGC will hold approximately 19%, and new
investors will hold an aggregate of 2%. Holdco will own all of the
issued and outstanding shares of Etea Sicurezza and have cash of
approximately $1 million.
The letter of intent provides that at the closing of the
proposed transaction, the Board of Directors of Holdco will consist
of three nominees of Etea Sicurezza and two nominees of LGC,
of whom at least a majority will be independent directors within
the meaning of Canadian securities regulations.
The proposed transaction is subject to a number of conditions,
including completion of due diligence reviews by LGC and
Etea Sicurezza, to their respective satisfaction; the absence
of any material adverse change with respect to Etea Sicurezza;
the negotiation and execution by LGC and Etea Sicurezza of a
definitive agreement in respect of the transaction; receipt of all
corporate approvals, including approval of the Boards of Directors
of LGC and Etea Sicurezza; and receipt of all other necessary
regulatory approvals, including that of the TSX Venture Exchange,
as the proposed transaction may be a "Reviewable Transaction" under
Policy 5.3 "Acquisitions and Dispositions on Non-Cash Assets"
of the TSX Venture Exchange. LGC cannot give any assurance that
such conditions will be satisfied, that the proposed transaction
will be successfully completed or as to the timing of the proposed
transaction.
LGC also announces that it has completed its
previously-announced transaction (see LGC press release -
October 10, 2017) whereby LGC is guaranteeing repayment by
Etea Sicurezza of notes issued by it in an aggregate principal
amount of USD $1,000,000. As consideration for the guarantee,
Etea Sicurezza will issue shares to LGC representing 3% of its
outstanding shares and pay a cash fee to LGC. These shares will be
cancelled upon completion of the proposed transaction described in
this press release, with the guarantee from LGC remaining in force.
The letter of intent with Etea Sicurezza does not provide for a
distribution by LGC a portion of the shares of Etea Sicurezza to
LGC's shareholders, as referred to in LGC's previous press release,
although LGC may consider this option at a future date, subject to
regulatory approval.
About LGC Capital
(http://www.lgc-capital.com)
LGC Capital Ltd. is a Canadian incorporated public company
listed on the TSX Venture Exchange (TSXV: LG). LGC's objective is
to become a diversified business group with core business divisions
that provide shareholders with exposure to a diverse range of
businesses, products and services.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements with
respect to LGC Capital Ltd. ("LGC"), its operations, strategy,
investments, financial performance and condition. These statements
generally can be identified by use of forward-looking words such as
"may", "will", "expect", "estimate", "anticipate", "intends",
"believe" or "continue" or the negative thereof or similar
variations. The actual results and performance of LGC, including
the proposed transaction with Etea Sicurezza described herein,
could differ materially from those expressed or implied by such
statements. Such statements are qualified in their entirety by the
inherent risks and uncertainties surrounding future expectations.
Some important factors that could cause actual results to differ
materially from expectations include, among other things, general
economic and market factors, competition, government regulation and
the factors described under "Risk Factors and Risk Management" in
LGC's Management's Discussion and Analysis for the fiscal year
ended September 30, 2016, as filed on SEDAR (www.sedar.com).
The cautionary statements qualify all forward-looking statements
attributable to LGC and persons acting on its behalf. Unless
otherwise stated, all forward-looking statements speak only as of
the date of this press release and LGC has no obligation to update
such statements, except to the extent required by applicable
securities laws.
Information Relating to Etea Sicurezza Group Ltd
All information contained in this press release relating to
Etea Sicurezza has been provided to LGC by
Etea Sicurezza. LGC has relied upon this information
without having made independent inquiries as to its accuracy or
completeness and assumes no responsibility for any inaccuracy or
incompleteness of such information.
Caution Regarding Press Releases
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 LGC Capital Ltd