Day4 Energy Inc. (“Day4” or the “Company”) (TSX: DFE), announces that Day4 and 0941212 B.C. Ltd. (“094”) a company indirectly owned and controlled by George Rubin (President and CEO of Day4) and Douglas Keast (Executive Vice-President and CFO of Day4), have entered into an agreement which proposes an arrangement (the “Arrangement”) among Day4, Day4’s shareholders and 094 (the “Arrangement Agreement”).
Under the Arrangement, Day4 will transfer all of its business, assets and operations to 094, in exchange for cash consideration of $500,000 and 094 will assume all of the liabilities of Day4. The Arrangement will be effected by way of a court approved statutory plan of arrangement under the Business Corporations Act (British Columbia). Following the completion of the Arrangement, Day4 will have no assets or liabilities other than $500,000 cash. Following the Arrangement, Day4 will seek to review strategic alternatives to realize any additional value. There can be no assurance that Day4 will realize any additional value.
The completion of the Arrangement is subject to the satisfaction of a number of conditions including approval of the Arrangement by the shareholders of Day4, the Supreme Court of British Columbia and other regulatory approvals. The Arrangement requires the approval by at least 66 2/3% of the votes cast by holders of Day4 shares and must also be approved by the holders of Day4’s shares other than those shares held by George Rubin and Douglas Keast. The Arrangement is exempt from the valuation requirements of applicable securities legislation as Day4 is considered to be in financial hardship and the transaction is designed to improve Day4’s financial position. The transaction was approved by a special committee of independent Day4 directors. Prior to the approval of the transaction, the board of directors obtained a fairness opinion that the Arrangement is fair, from a financial point of view, to the shareholders of Day4.
Day4 shareholder approval will be sought at the annual and special meeting currently scheduled for June 27, 2012. It is anticipated that materials for such meeting will be mailed to Day4 shareholders on or about June 1, 2012. Subject to satisfaction of all conditions, completion of the Arrangement is expected to occur on June 29 or such later date as Day4 may announce by press release.
Delisting
Day4 previously announced that it received notice from the Toronto Stock Exchange (the “TSX” or the “Exchange”) that the TSX is reviewing the eligibility for continued listing of the Company’s securities on the Exchange.
In light of the proposed Arrangement and the inability of Day4 to meet continued listing requirements of the Exchange, Day4’s board of directors have authorized Day4 to apply to the TSX for a voluntary delisting of its common shares from the Exchange. Day4 will make a further announcement regarding the specific timing of the delisting.
