CALGARY, May 30, 2016 /CNW/ - ArPetrol Ltd. ("ArPetrol" or
the "Company") (TSXV: RPT) provides an update on the sale of
substantially all of its assets (the "Transaction") to a subsidiary
of Empresa Nacional Del Petróleo, which closed on May 19, 2016. The Company also announces its
financial and operating results for the three months ended
March 31, 2016. The Company's interim
condensed consolidated financial statements and management's
discussion and analysis ("MD&A") for the reporting period have
been filed on SEDAR at www.sedar.com and posted on the Company's
website at www.arpetrol.com.
Update on Transaction
As previously announced, ArPetrol successfully closed the
Transaction on May 19, 2016. The
purchase price paid to the Company at closing of the Transaction
was US$11.1 million (approximately
CAN$14.5 million), including the net working capital at
closing of the subsidiaries being sold of US$2.1 million. This net working capital amount
is subject to a 90-day post-closing adjustment period. In addition,
US$2.25 million of the purchase price
was placed into an escrow account at closing and will be released
to ArPetrol in November 2016
following the six-month indemnity period, subject to any negative
adjustments to the working capital calculation or indemnity amounts
being claimed against the escrowed funds.
As a result of the completion of the Transaction, the Company no
longer has active business operations or assets other than the cash
proceeds from the Transaction. ArPetrol now plans to focus on the
efficient winding-up of the affairs of the Company, including the
distribution of the net proceeds from the Transaction to the
ArPetrol shareholders (the "Shareholders"). The Company plans to
apply for delisting of the Company's common shares (the "Common
Shares") from the TSX Venture Exchange ("TSXV") after the first
distribution to Shareholders, but the TSXV may on its own
initiative delist the Common Shares sooner or transfer the listing
to the NEX Board.
The Company currently plans to make the distributions to
Shareholders in three instalments as a return of capital on the
Common Shares. The first distribution will be made from the
immediately-available cash resources of the Company as soon as
practicable following the completion of the 90-day post-closing
adjustment period. The first distribution is expected to be in the
range of 65% to 70% of total proceeds (subject to any adjustments
or indemnity claims) and is expected to be paid in September
2016. The second distribution is expected to occur by year-end
after expiry of the six month indemnity period and the release of
the escrowed funds (subject to any indemnity claims). The
amount of the second distribution is uncertain due to, among other
things, foreign exchange rates, potential claims under the
indemnity provisions of the Transaction and the costs associated
with Company's dissolution and settlement of all outstanding
obligations. The Company plans to apply for a Canada Revenue Agency
("CRA") clearance certificate in connection with the dissolution of
the Company and before the final distribution is made to
Shareholders, and the timing for receipt of the CRA clearance
certificate is unknown. The final distribution, which is
anticipated to be nominal, is expected to be made after the CRA
clearance certificate is received and all liabilities are
settled. While the total amount of the distributions is not
certain, the Company expects that the total distributions to the
Shareholders from the three instalments will be in the aggregate
range of approximately $0.59 to $0.62
per Common Share. The ultimate distributions may be lower in
the event of a negative change to the foreign exchange rate or if
any significant liabilities or costs arise during the winding up
and dissolution process which are not currently foreseen by the
Company or its advisors.
The Company will issue further press releases advising
Shareholders of the timing and details of these various events and
the record dates for distributions.
Summary of the First Quarter 2016
Operating and Financial
As a result of the closed Transaction, the operating results for
the Company's foreign operations in Barbados and Argentina were classified as discontinued
operations in the March 31, 2016
financial statements. The operating results of the Canadian
parent company were classified as continuing operations in the
March 31, 2016 financial
statements.
The net loss from continuing operations was $403,516 for the first quarter of 2016 compared
to a net loss of $314,422 for the
comparative period in 2015. The increase in the net loss is
primarily due to increased costs related to the Transaction.
The net income from discontinued operations was $232,694 for the first quarter of 2016 compared
to a net income of $533,026 for the
comparative period in 2015.
The components of the net income from discontinued operations
were:
As at and for the
three months ended
|
March 31,
2016
|
March 31,
2015
|
|
$
|
$
|
Revenue
|
|
|
Production
sales
|
1,006,513
|
564,039
|
Processing
sales
|
2,715,369
|
2,479,500
|
Royalties and
turnover taxes
|
(287,166)
|
(197,733)
|
|
3,434,716
|
2,845,806
|
Expenses
|
|
|
Operating
|
1,775,644
|
1,698,057
|
General and
administrative
|
615,425
|
260,347
|
Foreign exchange
loss
|
638,781
|
110,982
|
Depletion,
depreciation, and amortization
|
254,855
|
280,156
|
Financing
income
|
(142,041)
|
(76,687)
|
Financing
expense
|
59,358
|
39,925
|
Net income
relating to discontinued operations
|
232,694
|
533,026
|
|
|
|
Notes: All values in
the news release are in Canadian dollars unless otherwise
indicated.
|
About ArPetrol Ltd.
ArPetrol is a Calgary-based
publicly traded company whose Common Shares are listed on the TSXV
under the symbol "RPT". The Company has completed a sale of
substantially all of its assets and no longer has active business
operations.
Forward-Looking Information
Certain information provided in this press release constitutes
forward-looking statements and information within the meaning of
applicable securities laws. Specifically, and without limitation,
this press release contains forward-looking statements and
information relating to the anticipated timing for delisting of the
Common Shares, the CRA clearance certificate process, and the
expected timing and amount of distributions to Shareholders.
Forward-looking information typically contains statements with
words such as "anticipate", "believe", "forecast", expect", "plan",
"intend", "estimate", "propose", "project", or similar words
suggesting future outcomes. The Company cautions readers and
prospective investors in the Company's securities not to place
undue reliance on forward-looking information as, by its nature, it
is based on current expectations regarding future events that
involve a number of assumptions, inherent risks and uncertainties,
which could cause actual results to differ materially from those
anticipated by the Company. In particular, liabilities, costs or
obligations (including potential tax obligations) may arise,
currency exchange rates may change or other events may transpire in
the future not currently foreseen by the Company that may result in
distributions to Shareholders that are lower than those discussed
herein or occur at different times than those discussed herein.
Shareholders and potential investors are heavily cautioned against
relying on the anticipated timelines or estimated amounts of
distributions provided in this press release.
In respect of the forward-looking statements and information set
out in this press release, the Company has provided such in
reliance on certain assumptions that it believes are reasonable at
this time, including assumptions as to the stability of currency
exchange rates, the accuracy of estimated net working capital
calculations at closing, the number of shares outstanding at the
time of the distributions to Shareholders, the estimated amount of
the transaction and dissolution costs and the liabilities and
obligations of the Company, the estimated amount of net proceeds
remaining for distribution to Shareholders, the delisting process
of the TSXV and the process for obtaining the CRA clearance
certificate.
There are a number of risk factors associated with the
completion of the liquidation and dissolution of the Company, the
delisting of the Common Shares and the amount and timing of
distributions to be made to Shareholders that could cause actual
results to differ materially from those anticipated by the Company,
including but not limited to, risks of negative working capital
adjustments and/or indemnity claims against the Company in
connection with the Transaction, uncertainties regarding the actual
transaction and dissolution costs and obligations and liabilities
(including potential tax obligations) of the Company, changes in
currency exchange rates and the risk of the TSXV delisting the
Common Shares earlier than expected. Readers should also refer to
"Forward Looking Statements" and "Meeting Matters – Approval of the
Asset Sale Transaction - Risk Factors Associated with the
Asset Sale Transaction and – Approval of Voluntary Delisting of the
Common Shares from the TSXV – Risk Factors for Delisting" in the
Company's Information Circular dated April
4, 2016 filed on SEDAR at www.sedar.com for a further
discussion of the risks associated with the distributions to be
made to Shareholders and the delisting of the Common Shares.
The forward-looking information included herein is expressly
qualified in its entirety by this cautionary statement. The
forward-looking information included herein is made as of the date
hereof and the Company assumes no obligation to update or revise
any forward-looking information to reflect new events or
circumstances, except as required by law.
Additional information relating to the Company is also available
on SEDAR at www.sedar.com.
Neither the TSXV nor its Regulation Services Provider (as
defined in the policies of the TSXV) accepts responsibility for the
adequacy or accuracy of this release.
SOURCE ArPetrol Ltd.