CALGARY, Alberta, March 10, 2020 (GLOBE NEWSWIRE) -- Cordy Oilfield Services Inc. (“Cordy” or the “Company”) (TSX VENTURE: CKK) is pleased to announce that its wholly owned subsidiary Cordy Environmental Inc. (“CEI”) has entered into an asset purchase agreement dated March 10th, 2020 with Platinum North Resources Ltd. (“Platinum North”) and Heart River Holdings (2011) Ltd. (“Heart River”), collectively the “Vendors”, to purchase, for an aggregate purchase price of $4.25 million, subject to customary adjustments, all of the business, assets, property and equipment used in the Vendors’ business operating in northern Alberta and northeastern British Columbia (the “Acquisition”).
Purchase Price and Payment
The aggregate purchase price for the Acquisition is $4.25 million, subject to adjustments, is payable by way of cash payments at closing of $2,500,000, the issuance of 25,000,000 ($750,000) common shares of Cordy at a deemed price of $0.03 per common share and promissory notes in the principal amount of $1,000,000. The promissory notes are non-interest bearing and will be due and payable 150 days following the closing and their repayment will be secured by a general security agreement.
Financing
In conjunction with the acquisition, CEI has entered into a sale and leaseback agreement with a private lender in the net amount of $4,250,000, payable over a five-year term with an effective interest rate of 7.45%.
Platinum North and Heart River
The Vendors operate diversified transportation and logistics services businesses which primarily support liquid waste management and reclamation and remediation in the oil and gas industry in northern Alberta. The assets utilized include a fleet of winch trucks, texas beds, picker trucks, end dumps, walking floors, gravel trucks and flat deck super B's. The Acquisition complements Cordy’s existing liquid waste business and expands its reclamation and remediation capabilities. Additionally, the Acquisition provides a strategic expansion of Cordy’s geographical footprint into a corridor that, over the long term, should see an increase in demand for services from an increase in exploration and production of natural gas to support LNG Canada and Costal Gas Link. The Acquisition further exemplifies Cordy’s goal to continue to develop sustainable operations, with a focus on waste management and responsible environmental stewardship.
By way of the Acquisition, Cordy will be adding approximately 20 employees and contract operators. Cordy is also pleased to announce that the former president and CEO of the Vendors, Craig Heitrich, will be retained as a Vice President and Chief Operating Officer of Cordy.
The Acquisition is subject to the satisfaction of customary closing conditions, including the acceptance of the TSX Venture Exchange (“TSXV”).
Additional information on Cordy is available on our website www.cordy.ca or on SEDAR at www.sedar.com.
| For general information, please contact: Darrick Evong Chief Executive Officer IR@cordy.ca Phone: (403) 262-7667 |
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Information: This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein are forward-looking information. In particular, this news release contains forward-looking information in relation to: the proposed Acquisition; the business, assets, property and equipment of the Vendors in the proposed Acquisition; the satisfaction of the conditions for completion of the proposed Acquisition; the issuance of common shares to satisfy a portion of the purchase price for the proposed Acquisition; the availability of satisfactory financing for the proposed Acquisition; and the potential closing date for the proposed Acquisition. This forward-looking information reflects Cordy’s current beliefs and is based on information currently available to Cordy and on assumptions Cordy believes are reasonable. These assumptions include, but are not limited to: the completion of satisfactory due diligence by Cordy in relation to the proposed Acquisition; the satisfactory fulfilment of all of the conditions precedent to the proposed Acquisition; the receipt of all required approvals for the proposed Acquisition including Cordy board of directors approval, and TSXV acceptance; the issuance of the common shares as disclosed above as part of the purchase price for the proposed Acquisition; market acceptance of the proposed Acquisition; and acceptable financing to complete the proposed Acquisition. Forward looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Cordy to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; general capital market conditions and market prices for securities; delay or failure to receive board or regulatory approvals; the actual results of future operations; competition; changes in legislation, including environmental legislation, affecting Cordy; the timing and availability of external financing on acceptable terms; conclusions of economic evaluations and appraisals; and lack of qualified, skilled labour or loss of key individuals. A description of additional assumptions used to develop such forward-looking information and a description of additional risk factors that may cause actual results to differ materially from forward-looking information can be found in Cordy’s disclosure documents on the SEDAR website at www.sedar.com. Although Cordy has 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. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Forward-looking information contained in this news release is expressly qualified by this cautionary statement. The forward-looking information contained in this news release represents the expectations of Cordy as of the date of this news release and, accordingly, is subject to change after such date. However, Cordy expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.