SKANA Enters Into Agreement to Acquire Bus and Coach International
Posted on May 08, 2009 at 09:00 AM EDT
VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 8, 2009) -
NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES
SKANA Capital Corp. ("SKANA") (TSX VENTURE:SKN) is pleased to announce that it has entered into a binding term sheet (the "Agreement") with Bus and Coach International ("BCI") dated as of May 6, 2009, pursuant to which SKANA has agreed to acquire all of the issued and outstanding equity of BCI in exchange for common shares of SKANA (the "Acquisition"). BCI and SKANA are arm's length parties.
Pursuant to the Acquisition, SKANA will issue 51,169,518 common shares of SKANA, to the shareholders of BCI in exchange for 100% ownership of BCI. Based on the number of issued and outstanding common shares of SKANA on May 6, 2009, this represents that number of common shares of SKANA that results in shareholders of BCI holding 49.5% of SKANA after giving effect to the transaction. Upon completion of the transaction, SKANA will have 103,372,764 shares issued and outstanding. Completion of the Acquisition remains subject to a number of conditions, including execution of a definitive agreement, completion of satisfactory due diligence by both sides and receipt of all required regulatory and corporate approvals, including, without limitation, the approval of the TSX Venture Exchange.
BCI is a private Nevada company engaged in the design, manufacture and sale of transit buses and motor coaches from its offices in Jennings, Kansas, Las Vegas, Nevada, Orlando, Florida and Southern California. BCI's flagship model, the BCI Falcon 45, was the first full-size motor coach to offer passenger seat belts and collision avoidance radar as standard equipment and to fully meet European rollover standards. Its features and design are consistent with BCI's goal of delivering innovative, cost-effective products that address the business challenges motor coach operators face. BCI is controlled by Phillip Oldridge, a resident of Nevada. Mr. Oldridge is BCI's Chief Executive Officer and President, and holds 52% of the issued and outstanding common shares of BCI. GY General Holdings, LLC ("GY"), a Nevada limited liability company holds 40% of the issued and outstanding shares of BCI. GY is managed by Pronaia Capital Partners, LTD, a private equity management firm headquartered in Salt Lake City, Utah, which is headed by David M. Senior, its Chairman and Chief Executive Officer. On closing of the Acquisition, BCI will have debt of not more than US$21.5 million held by Mr. Oldridge and GY (or their respective associates).US$9.5 million of the debt will be exchanged for promissory notes (collectively, the "Notes") of SKANA secured by inventory and work in progress. The interest on the Notes will be at 7.5% per annum and will have a term of 18 months, subject to certain other conditions being met. The remaining US$12 million of debt will be paid down by SKANA.
Following the Acquisition, BCI will be entitled to occupy two seats on the seven member Board of Directors of SKANA. Phillip Oldridge and David Senior have been so nominated for appointment to fill vacancies to be created by the resignation of two current SKANA directors. Mr. Oldridge has over 20 years experience in the transportation industry, specifically in operations, manufacture, sales and leasing of motor coaches. He previously ran one of the largest charter bus companies in Nevada. Mr. Senior is a professor of international business management with many years of commercial investment management experience. These new directors will strengthen SKANA's Board with appropriate expertise recognizing the diversification of its portfolio through the BCI investment. Mr. Oldridge and his existing management team will continue to manage the business of BCI on behalf of SKANA.
The shares issued to the shareholders of BCI pursuant to the Agreement will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"). Such securities may not be offered or sold in the United States unless they are either registered under the Securities Act or there is an applicable exemption from registration under the Securities Act. The Acquisition is being structured as a transaction exempt from registration under the Securities Act.
Trading of the shares of SKANA will remain halted pending review of the proposed transaction by the TSX Venture Exchange.
About Bus and Coach International
BCI is a private Nevada company engaged in the design, construction and sale of transit buses and motor coaches from its offices in Jennings, Kansas and other U.S. locations.
About SKANA Capital Corp.
SKANA is listed on the TSX Venture Exchange as an Investment Issuer and carries on business as a merchant bank. It has previously made strategic investments in resource-based and other opportunities that it believes have significant potential for appreciation through its financial involvement and guidance. SKANA is seeking to diversify its investment portfolio beyond the resource sector and has expanded its investment policy to include companies in the industrial and technology sectors. SKANA's investment in 100% of BCI will be its first transaction under its expanded investment policy.
Bus and Coach International
Phillip Oldridge, Chief Executive Officer & President
SKANA Capital Corp.
Greg Clarkes, Chairman, Chief Executive Officer and President
Cautionary Note Regarding Forward-Looking Information This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the future financial or operating performance of BCI and SKANA and their projects, statements regarding synergies and financial impact of the proposed transaction, the terms and conditions of the transaction, the benefits of the proposed transaction, timing of future activities, expected production, requirements for additional capital, government regulation, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Generally, forward-looking information 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 state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".
Forward-looking information is based on various assumptions and on the best estimates of BCI and SKANA, as the case may be, as of the date hereof, and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of BCI (and the company resulting from the successful completion of the proposed transaction) to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; delay or failure to receive board or regulatory approvals; timing and availability of external financing on acceptable terms; the business of BCI and SKANA not being integrated successfully or such integration proving more difficult, time consuming or costly than expected; not realizing on the potential benefits of the proposed transaction; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and delays in obtaining governmental approvals or required financing or in the completion of activities, and as well as those other risks identified in the documents filed under the profile of SKANA rom time to time. Although BCI and SKANA attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information 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 information. Neither BCI nor SKANA undertake to update any forward-looking information, except in accordance with applicable securities laws.The Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
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