Empire Announces Preferred Share Exchange Offer

Empire Announces Preferred Share Exchange Offer

WINNIPEG, Manitoba, Dec. 20, 2019 (GLOBE NEWSWIRE) — With reference to its prior News Releases dated June 11, 2019 and November 14, 2019, Empire Industries Ltd. (TSX-V: “EIL”, “Empire” or the “Company”) is pleased to announce, subject to the approval of the TSX Venture Exchange (“TSX-V”), that the Company is prepared to incentivize the holders of all of the issued and outstanding Preferred Shares (defined below) to exchange the same for Class “A” Common Shares (“Common Shares”) of the Company on or before December 31, 2019. 
There are currently 1,136,000 convertible preferred shares in the capital of Company (each a “Preferred Share” and together the “Preferred Shares”) issued and outstanding, which Preferred Shares have a redemption value of $10 per Preferred Share, accrue dividends at 8% per annum and are convertible into Common Shares of the Company at $0.45 per Common Share (the “Current Conversion Price”) for a period of 36 months from the date of issue and thereafter for $0.75 per Common Share until 60 months from the date of issue.The holders of the Preferred Shares will be provided with the opportunity to exchange the Preferred Shares (the “’Capital Reorganization”) early for an aggregate of up to 32,906,162 Common Shares at a weighted exchange price of $0.444 per Common Share comprised of 25,244,444 Common Shares at the Current Conversion Price and 7,661,718 Common Shares at $0.425 per Common Share as a premium for the early exchange (the “Share Exchange Premium”). The Share Exchange Premium cash value of $3,356,230 is equivalent to 3.583 years of forgone 8% cumulative dividends that would have accrued on the Preferred Shares if they are not exchanged early. Certain insiders of the Company are holders of the Preferred Shares and as such their participation in the Capital Reorganization is a “related party transaction” within the meaning of TSX-Venture Policy 5.9 and Multilateral Instrument 61-101. The Company is relying on an exemption from the formal valuation and minority approval provisions of Multilateral Instrument 61-101 in reliance on sections 5.5(a) and 5.7(a) on the basis that the aggregate fair market value of the Capital Reorganization, insofar as each insider is involved, does not exceed 25% of the market capitalization of the Company. It is expected that a material change report will be filed less than 21 days before the completion of the Capital Reorganization. The Company considers this shorter period to be reasonable and necessary in the circumstances to allow the Company to complete the Capital Reorganization as soon as possible.About Empire Industries Ltd.Empire focuses on designing, supplying, and installing iconic media-based attractions and ride systems for the global theme park industry. Empire also uses these same turn-key integration services for special projects such as large optical telescopes and enclosures. Empire also has commenced an initiative to leverage its world class flying theater and attraction development capability on a co-venture ownership basis. Empire’s common shares are listed on the TSX Venture Exchange under the symbol EIL. Empire’s common shares are listed on the TSX Venture Exchange under the symbol EIL.For more information about the Company, visit www.empind.com or contact:Reader AdvisoryThis news release contains forward-looking statements, within the meaning of applicable securities legislation, concerning Empire’s business and affairs. In certain cases, forward-looking statements can be identified by the use of words such as ‘‘plans’’, “evaluating” ‘‘expects’’ or ‘‘does not expect’’, ‘‘budget’’, ‘‘scheduled’’, ‘‘estimates’’, “forecasts’’, ‘‘intends’’, ‘‘anticipates’’ 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’’. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although Empire believes these statements to be reasonable, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. Such statements include statements with respect to (i) completion of the Capital Reorganization; and (ii) acceptance by the TSX Venture Exchange of the Capital Reorganization. Actual results could differ materially from those anticipated in these forward-looking statements as a result of prevailing economic conditions, and other factors, many of which are beyond the control of Empire. The forward-looking statements contained in this news release represent Empire’s expectations as of the date hereof, and are subject to change after such date. Empire disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as may be required by applicable securities regulations. Neither the 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.
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