Beijing Tairui Innovation Capital Management Ltd has made an C$80 million investment in Western Potash Corp, which explores and develops potash mineral properties in Western Canada. Also, CBC Holding Corp has increased its stake in Western, investing over C$720,000 in the company. As a result of these transactions, Tairui now holds a 51 percent ownership stake in Western while CBCHC has a 10.1 percent ownership interest.
VANCOUVER, BRITISH COLUMBIA–(Marketwired – Sept. 16, 2015) – Western Potash Corp. (“Western” or the “Company”) (TSX:WPX)(FRANKFURT:AHE) is pleased to announce the closing of the previously announced strategic investment from Beijing Tairui Innovation Capital Management Ltd. (“Tairui”), whereby Tairui has purchased 238,264,635 common shares of Western (“Common Shares”) at a price of $0.3358 per share for an aggregate purchase price of $80 million (the “Transaction”). In conjunction with the Transaction, CBC (Canada) Holding Corp. (“CBCHC”) has purchased 2,144,865 Common Shares also at $0.3358 per share, pursuant to the exercise of its pre-emptive anti-dilution right with the Company, for an aggregate purchase price of $720,245.67. CBCHC made an initial investment in the Company in 2013 in the amount of approximately $32 million.
Following completion of the Transaction, including the issuance of Common Shares to CBCHC under its pre-emptive right, Tairui holds a 51% ownership stake, and CBCHC holds a 10.1% ownership stake, in Western on a non-diluted basis. All securities issued in connection with the Transaction to Tairui and CBCHC are subject to a four month hold period in accordance with Canadian securities laws. On closing of the Transaction, the Company has 467,185,559 issued and outstanding Common Shares.
The per share issue price of $0.3358 represents an approximate 53% premium over the volume-weighted average price of the Common Shares on the Toronto Stock Exchange for the 30 trading days ended July 3, 2015, the last trading day prior to the initial public announcement of the Transaction.
Tairui is a China based private equity investment company with a focus on the energy and mining industries. The management team has extensive experience in project management and investment management in the natural resource sector.
Highlights of the Transaction
The Transaction provides Western with a significant capital infusion that will enable the Company to advance its current business plan to develop the pilot plant on the Milestone Project (the “Pilot Plant”), as announced and described in the Company’s news release dated July 2, 2015. Operational demonstration of the Pilot Plant would provide the longer-term opportunity for Western to further develop its high quality and significant potash resources in Saskatchewan with financially and technically strong strategic partners in Tairui and CBCHC.
The highlights and benefits of the Transaction include:
equity financing for advancement of Western’s Pilot Plant on the Milestone Project at a significant premium to currently depressed market prices for Western’s Common Shares;
a strategic alliance that will provide Western with access to project financing, technical expertise in large scale project construction, and management and marketing channels for future potash sales; and a continuing opportunity for holders of Western’s Common Shares to participate in the future advancement of the Milestone Project.
Approval of the Transaction was received at a Special General Meeting of the Company’s shareholders held on August 24, 2015. As outlined in the Management Information Circular dated July 24, 2015, Deloitte Corporate Finance Inc. provided an opinion to the Board of Directors of Western to the effect that, as of the date of, and subject to the assumptions, limitations and qualifications contained in, the opinion, the Transaction is fair, from a financial point of view, to Western shareholders.
“The greatest challenge to the Milestone Project has always been financing risk,” said Pat Varas, Western’s President & CEO. “Today’s transaction represents a major step in risk reduction. Western has been actively canvassing the globe for a strategic partner with the financial strength to help us execute on the Pilot Plant. We believe that Tairui is an ideal partner. We believe that this strategic investment provides our shareholders with much greater value than an outright sale of the project or a dilutive standalone public financing would in the current depressed markets. The Transaction represents an opportunity not afforded to the shareholders of many junior companies at the moment.”
“Since the signing of the term sheet 11 months ago, we have had the opportunity to broaden our knowledge of the Milestone Project,” said Bill Xue, President of Tairui. “In fact, the scoping study results delivered in July of this year provide for a scalable and more flexible approach to the project. At Tairui, we look to invest in advanced projects with a large resource base and without environmental complications. The scalability we see in the scoping study is attractive from a cost and project timeline perspective and renders the project relatively more competitive. The Western Potash team is highly skilled, committed and passionate. In combining the resources of Tairui with the high quality
Milestone Project and an innovative development process, we are excited about the future prospects for Western.”
Nominees to Western’s Board of Directors
Effective upon closing of the Transaction, the following nominees of Tairui were appointed to Western’s Board of Directors:
Chang (Geoffery) Xiaogang, Director
Mr. Chang is a graduate of Tsinghua University School of Economics and Management with a Master’s Degree in Business Administration. He served successively as President and Chairman of Shanxi Top Energy Company Ltd., Deputy Chairman of Shanxi Securities Ltd., Deputy Chairman of Shanxi Zhangze Power Company Ltd., Chairman and President of Shanxi International Power Group Ltd., full-time independent director for Central State-owned Enterprise, and Director of China International Travel Service Group Corporation.
Xue (Bill) Wenye, Director
Mr. Xue graduated from Beijing Jiaotong University, majoring in Construction Management. He also holds a Master’s Degree in Business Administration, and a law degree. Mr. Xue served respectively as General Manager of Top Energy Lishi Coal Mine, Vice President of Shanxi Top Energy Company Ltd., President of Shanxi Financial Leasing Company Ltd., and Vice President of Shanxi International Electricity Group Company Ltd. He is currently the President of Tairui.
Wang Yinping, Director
Mr. Wang graduated with a Law Degree from Renmin University of China. He also has a Master’s Degree in Business Administration from China Europe International Business School. He has 27 years’ experience with SINOCHEM Group, of which he was Vice President of the Group for 16 years, where he was responsible for matters that included international trade, finance, real estate and the chemical industry. He served respectively as President and Chairman of two Shanghai Stock Exchange listed companies (SINOCHEM International and International Group Co. Ltd., both of which are SINOCHEM member companies), as well as President of China Foreign Economy & Trade Trust. Since 2015, he has served as the CEO of China Pioneer Pharma Holdings Limited, a Hong Kong listed company.
Sun (Linda) Limin, Director and Executive VP of Communications
Ms. Sun graduated from Northeastern Normal University with a Bachelor’s Degree in English Literature, and a Diploma of International Economics & Trading from the University of International Business & Economics Beijing. She has an extensive background in International and Government relations beginning with the Ivanhoe Group Companies. She has been with Western Potash since 2011 and has played a significant role in the Company’s important strategic transactions with CBCHC and Tairui.
Messrs. David Hodge, Peter Miles and Troy Nikolai have stepped down from the Board of Directors as part of the Transaction in order to accommodate the incoming directors. The Company is grateful for their significant contributions and service in helping to advance Western from inception through to this important step. Mr. Nikolai will remain in the role of Chief Financial Officer. The incumbent directors are Patricio Varas, Patrick Power, Buddy Doyle and Wang Hui, the last of which is CBCHC’s nominee on Western’s Board.
Copies of the subscription agreement governing the Transaction, the Management Information Circular, and certain related documents and agreements are filed with Canadian securities regulators and are available on the SEDAR website at www.sedar.com under Western’s profile.
Western is a development company engaged in the evaluation, exploration and development of potash mineral properties in Western Canada. Western intends to develop a world-class potash deposit in an ecologically sustainable, economically efficient and socially responsible manner. For more information on Western’s projects, please visit Western’s website at: www.westernpotash.com.
ON BEHALF OF THE BOARD OF DIRECTORS
J. Patricio Varas, President and CEO