CALGARY,
May 23, 2014 /CNW/ - CMQ
Resources Inc. (TSXV:NV) ("CMQ") announces today that the
independent members of its board of directors have approved a going
private transaction to be completed by consolidating CMQ common
shares on the basis of 1 post-consolidated common share for each
21,000,000 pre-consolidated common shares (the
"Consolidation"). The Consolidation is subject to required
shareholder approvals at an upcoming annual and special meeting of
shareholders of CMQ expected to be held on or about June 30, 2014 (the "Meeting").
The Consolidation will result in all of the
shareholders of CMQ (except for Matco Investments Ltd.
("Matco")) holding a fractional interest in the
post-consolidated common shares of CMQ. As fractional shares will
not be issued, each shareholder of CMQ will receive a cash payment
in an amount to be confirmed by an independent third party valuator
for each pre-consolidated common share held immediately prior to
the Consolidation in lieu of certificates for fractional
post-consolidated common shares (the "Consideration"). There
are currently 44,188,682 common shares of CMQ issued and
outstanding. After completion of the Consolidation, Matco will be
the sole shareholder of CMQ holding one (1) common share. Matco,
which is controlled by Mr. Ron
Mathison, a current director of CMQ, currently holds
21,989,833 common shares of CMQ, representing 49.77% of the total
common shares of CMQ and Mr. Mathison holds an additional 104,308
common shares personally.
The Consolidation is subject to approval of 66
2/3% of the common shares voted at the Meeting as well as the
approval of a majority of the votes cast by minority shareholders
at the Meeting pursuant to the requirements of Multilateral
Instrument 61-101 - Protection of Minority Security Holders in
Special Transactions.
The independent members of the board of directors
of CMQ expect to review the Consolidation, fix the Consideration
based on the third party valuation to be received and to confirm
the fairness of the Consideration.
Subject to the approval of the Consolidation at
the Meeting and the acceptance of the TSX Venture Exchange, CMQ
will file articles of amendment to effect the Consolidation. Once
the Consolidation is completed, CMQ intends to apply to have its
common shares delisted from the TSX Venture Exchange and intends to
apply to cease to be a reporting issuer with the applicable
securities regulatory authorities.
CMQ wishes to complete the going-private
transaction in order to eliminate the financial burden of
continuing as a reporting issuer and resolve its current financial
difficulties. CMQ believes that the anticipated time, costs and
regulatory requirements that would be entailed in meeting the legal
obligations to public shareholders cannot be justified in view of
CMQ's present circumstances, including financial condition and very
low trading volumes. As at May 23,
2014, 2014 CMQ was indebted to Matco and its affiliates in
the aggregate amount of $9,035,000,
comprised of: (i) $4,000,000
represented by outstanding debentures plus accrued interest thereon
of $784,000; (ii) $1,000,000 in respect of previous secured
advances; (iii) $2,700,000 unsecured
advances; and (iv) aggregate accrued interest on secured and
unsecured advances of $551,000.
As previously disclosed, CMQ has received a notice from Matco of
its intention to enforce its security and has been engaged in
discussions with Matco in an effort to attempt to negotiate the
potential further forbearance of enforcement on its indebtedness
and additional financing required in connection with its existing
projects. In the event that the Consolidation is not approved
or completed and no such additional forbearance or financing from
Matco can be obtained, CMQ expects that it will be unable to
continue its operations and to operate as a going
concern.
Further information on the terms and conditions
of the Consolidation shall be provided to the shareholders in the
management information circular for the Meeting, which will also be
available on SEDAR at www.sedar.com.
Additionally, CMQ has filed its 2014 Q1
consolidated financial statements and MD&A on SEDAR at
www.sedar.com.
Forward-Looking Statements
This press release contains certain forward-looking statements
and forward-looking information (collectively referred to herein as
"forward-looking statements") within the meaning of Canadian
securities laws, including with respect to the approval and
completion of the Consolidation, CMQ's ability to obtain
forbearance or additional financing, viability as a future going
concern and the obtaining of a valuation. All statements other than
statements of historical fact are forward-looking statements.
Forward-looking statements typically contain statements with words
such as "anticipate", "believe", "plan", "continuous", "estimate",
"expect", "intend", "may", "will", "shall", "project", "would",
"should", or similar words suggesting future outcomes.
Undue reliance should not be placed on forward-looking
statements, which are inherently uncertain, are based on estimates
and assumptions, and are subject to known and unknown risks and
uncertainties (both general and specific) that contribute to the
possibility that the future events or circumstances contemplated by
the forward-looking statements will not occur. There can be no
assurance that the plans, intentions or expectations upon which
forward-looking statements are based will in fact be realized.
Actual results will differ, and the difference may be material and
adverse to CMQ and shareholders. Forward-looking statements are
based on management's current beliefs as well as assumptions made
by, and information currently available to, management. Though
management considers these assumptions to be reasonable based on
information currently available to it, they may prove to be
incorrect. By their very nature, forward-looking statements involve
inherent risks and uncertainties, both general and specific, and
risks that forward-looking statements will not be achieved. The
forward-looking statements contained in this press release are made
as of the date hereof and CMQ does not undertake any obligation to
update publicly or to revise any of the included forward-looking
statements, except as required by applicable law. The
forward-looking statements contained herein are expressly qualified
by this cautionary statement.
SOURCE CMQ Resources Inc.