Tonbridge Power Inc. to be Acquired by Enbridge Inc.
August 16 2011 - 9:00AM
PR Newswire (Canada)
TORONTO, Aug. 16, 2011 /CNW/ -- TSX Venture Exchange Symbol: TBZ
TORONTO, Aug. 16, 2011 /CNW/ - Tonbridge Power Inc. (TSXV-TBZ)
("Tonbridge" or the "Corporation"), announced today that it has
entered into a definitive agreement to be acquired by Enbridge Inc.
(TSX:ENB) ("Enbridge") through a plan of arrangement for $0.54 per
share in cash (the "Arrangement"), representing a premium of 116%
to Tonbridge's closing share price of $0.25 on August 8, 2011 and a
premium of 74% to the 20-day volume weighted average trading price
of $0.31 as of August 8, 2011. The Tonbridge shares were halted
from trading at the request of Tonbridge before market open on
August 9, 2011. Pricing in respect of the Arrangement was
based, in part, on management's updated determination that at least
US$50 million in additional funding is required to complete the
construction of the Corporation's Montana Alberta Tie Ltd. ("MATL")
transmission line project (the "MATL Project"). The agreement is
subject to Tonbridge shareholder approval, regulatory approval and
other closing conditions. Tonbridge also announced that it has
entered into a settlement agreement with its EPC contractor in
respect of construction activities on the MATL Project. The
Corporation is in negotiations with a number of parties in order to
effect a resumption of construction as quickly as possible with a
view to meeting the Corporation's goal of delivering an operating
transmission line by mid-2012. "We are pleased to effect this
transaction as it addresses both Tonbridge's capital and project
needs while at the same time giving our shareholders value for
their investment. We look forward to completing the MATL Project
and accelerating our development of future projects as a part of
Enbridge," said Robert van Beers, Tonbridge Chief Executive
Officer. Acquisition of Tonbridge Under the Arrangement, in
addition to acquiring all of the outstanding common shares of
Tonbridge, Enbridge will repay approximately $50 million of debt
incurred in the development of the Corporation's MATL Project to
date. Enbridge may be entitled to receive approximately $9
million in a combination of cash and warrants should the
Arrangement not be completed. Tonbridge's Board of Directors, after
receiving the recommendation of its Special Committee and
consulting with its financial and legal advisors, has unanimously
determined that the Arrangement is in the best interest of the
Corporation and its shareholders and to recommend that Tonbridge
shareholders vote in favour of it. Stephens Inc. and J.J.R.
Capital Corp. have acted as financial advisors to the
Corporation. Clarus Securities Inc., acting as financial
advisor to the Special Committee, has provided an opinion that the
consideration to be received by Tonbridge shareholders is fair,
from a financial point of view, to Tonbridge shareholders. A
complete copy of the opinion will be appended to Tonbridge's
management information circular in respect of the Arrangement. The
directors, senior officers and certain institutional shareholders
of Tonbridge, holding together approximately 22.4% in the aggregate
of the issued and outstanding common shares of Tonbridge, have
entered into lock-up agreements under which they have agreed to
vote in favour of the Arrangement. Additional Transaction Details
The terms and conditions of the Arrangement will be summarized in a
management information circular, which is expected to be mailed to
Tonbridge shareholders before the end of August and filed on SEDAR.
The Arrangement will be subject, among other things, to the
approval of at least 66 ⅔% of the votes cast at a special meeting
of Tonbridge shareholders to be called to consider the Arrangement.
In addition, the Arrangement will be subject to certain customary
conditions, including court approval, relevant regulatory approvals
and the absence of any material adverse effect with respect to the
Corporation. The transaction is expected to close before September
30, 2011, subject to the satisfaction or waiver of various closing
conditions. Settlement Agreement with EPC Contractor Tonbridge has
settled all outstanding disputes with Rocky Mountain Contractors
("RMC"), and has terminated all aspects of its contractual
relationship with respect to the engineering, procurement and
construction contract with RMC to build the MATL Project. In
consideration for unpaid invoices, change requests and other claims
as well as for agreeing to terminate this contract on amicable
terms, MATL has agreed to forfeit US$12 million in security that
RMC is holding in escrow against payables in respect of labour,
equipment and certain materials as well as pay a further US$1
million. The Corporation has also agreed to the following
other elements in respect of the settlement agreement: (i) MATL has
agreed to take assignment of all of RMC's subcontractors associated
with the MATL Project and will take responsibility, at its expense,
for all remediation work in connection with the MATL Project; and
(ii) MATL will also pay RMC approximately US$1.7 million for
materials and equipment invoiced and payable under an arrangement
with under the Western Area Power Administration. Under this
arrangement, MATL will receive reimbursement once it has settled
this account. Future purchase orders under this arrangement will
become the responsibility of MATL. MATL has also agreed to
release RMC from all future liabilities and obligations arising
from the EPC contract including RMC's specific warranty obligations
under the contract related to the MATL Project. In consideration of
the above, RMC has agreed to remove all liens associated with MATL
and the MATL Project. RMC has also covenanted to work quickly
to enable an efficient transfer of all MATL Project related assets
and materials including, crossing agreements, IFC drawings,
subcontractor information, yards, residual equipment, MATL Project
related data, permits, matting and other matters necessary for MATL
to smoothly transition the contract to a new contractor(s). RMC
retains responsibility for any financial obligations to
subcontractors that occurred up to the date of this agreement and
covenants to ensure that all subcontractors, leases and suppliers
will be paid within 30 days of this agreement for work completed
but not yet invoiced and any liens resulting from failure to pay
will be RMC's responsibility. All transferable manufacturers
and subcontractor warranties will be transferred to MATL and in the
event that these are not transferrable RMC will hold those
warranties for MATL's benefit. RMC has agreed to release MATL from
all future liabilities and obligations arising from the EPC
contract and the MATL Project with the exception of those spelled
out in the agreement. The settlement and the termination of its
relationship on amicable terms with RMC enables MATL to re-start
construction of the MATL Project with other contractors and avoids
costly and time consuming litigation. Tonbridge Power Inc. is a
Toronto-based developer of electrical transmission assets, whose
principal asset is a 100% interest in Montana Alberta Tie Ltd.
Shares of the Corporation are traded on the TSX Venture
Exchange under the symbol "TBZ". The Corporation's financial
statements and other filings can be found on SEDAR. Should you wish
to receive news via email, please email info@tonbridgepower.com and
specify "company news". Cautionary Note Regarding Forward-Looking
Statements This news release contains "forward-looking statements",
within the meaning of applicable Canadian securities legislation,
concerning the business, operations and financial performance and
condition of the Corporation. Forward-looking statements include,
but are not limited to, statements with respect to the acquisition
of Tonbridge and the costs and timeline to complete the MATL
Project. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such
words and phrases or statements that certain actions, events
or results "may", "could", "should", "would", "might" or "will be
taken", "occur" or "be achieved". Forward-looking statements are
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, performance
or achievements of the Corporation to be materially different from
those expressed or implied by such forward-looking statements,
including but not limited to: the conditionality of the revenue
contracts, risks related to the financing or construction of the
transmission line; risks related to the performance of parties
contracting for transmission capacity; delays in obtaining
governmental approvals, permits or project financing or in the
completion of development or construction activities, requirements
for additional capital, government regulation, environmental risks
as well as those factors discussed in the Corporation's MD&A
for the three months ended March 31, 2011 available on
www.sedar.com. Although the Corporation has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward-looking statements,
there may be other factors that cause results not to be as
anticipated, estimated or intended. There can be no assurance that
such statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. The Corporation does not
undertake to update any forward-looking statements that are
incorporated by reference herein, except in accordance with
applicable securities laws. 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. To view this news release
in HTML formatting, please use the following URL:
http://www.newswire.ca/en/releases/archive/August2011/16/c4010.html
p Robert McFarlane, Chief Financial Officerbr/ (416) 850-2150
email: a
href="mailto:rmcfarlane@tonbridgepower.com"rmcfarlane@tonbridgepower.com/a
/p p align="left" Brisco Capital Partners Corp.br/ Graeme A. Dick,
Partnerbr/ (403) 561-8989 email: a
href="mailto:graeme@briscocapital.com"graeme@briscocapital.com/a /p
p align="left" Please Visit the Company's Website at: a
href="http://www.tonbridgepower.com/"www.tonbridgepower.com/a /p
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