Empire Industries Announces Appointment of James Chui as Non-Executive Chairman, Unsecured Related Party Loan
WINNIPEG, Manitoba, Nov. 25, 2019 (GLOBE NEWSWIRE) — Empire Industries Ltd. (TSX-V: EIL, OTC:ERILF) (“Empire”, “EIL”, “us”, “our” or the “Company”) today announced that James Chui has been appointed as Non-Executive Chairman, and that a company he controls has agreed to advance a $2 million unsecured related party loan to Empire.
Appointment of James Chui as Non-Executive ChairmanThe Board has appointed James Chui to serve as Non-Executive Chairman of Empire, effective immediately. Mr. Chui has been a director of Empire since 2017. He is the Chairman and CEO of Excellence Raise Overseas Limited (“EROL”), which owns 19.9% of Empire’s common shares. EROL has agreed to advance an unsecured loan to Empire as described below. Mr. Chui is also President of Jolly Admire Limited (“Jolly Admire”) which has agreed to sell its 26.5% stake in Dynamic Entertainment Group Ltd. to Empire in exchange for convertible preferred shares of Empire, as previously announced in the Company’s news release dated November 14, 2019. He is also a director of Tornado Global Hydrovacs Ltd. (TSXV:TGH) and was instrumental in arranging the private placement financing that led to the spinout of Tornado from Empire.“We are thrilled that James is taking on the Non-Executive Chairman role,” said Guy Nelson. “James’ connections in the business and financial markets have been invaluable to Empire, and we look forward to continuing to benefit from his association with Empire.”Unsecured Related Party LoanEROL has agreed to advance Empire $2,000,000 unsecured loan (the “EROL Loan”). EROL is a related party to Empire by virtue of its 18.4% common share ownership. The loan matures in 3 years, and bears interest at the rate of 8% per annum, payable upon maturity. The loan is postponed and subordinated to Empire’s senior lenders, but at EROL’s option, the principal amount (and accrued interest) may be used to exercise some or all of the 6,000,000 Empire warrants currently held by EROL. These warrants have an exercise price of $0.50 per warrant until December 22, 2019, at which time the exercise price increases to $0.75 until their expiration on June 22, 2021.The EROL Loan is also a “related party transaction” within the meaning of TSX Venture Exchange Policy 5.9 and MI 61-101 because Mr. James Chui is a Director and Non-Executive Chairman of the Company and an executive officer of EROL. The Company has relied on the exemption from the formal valuation requirement contained in Sections 5.5(a) of MI 61-101 on the basis that the fair market value pertaining to the EROL Loan does not exceed 25% of the Company’s market capitalization, calculated in accordance with MI 61-101. The Company has relied on the exemption from the minority approval requirement contained in section 5.7(f) of MI 61-101 in respect of the EROL Loan as the EROL Loan has been obtained from the related party on reasonable commercial terms that are not less advantageous to the Company than if the EROL Loan was obtained from persons dealing at arm’s length with the Company and the EROL Loan is not convertible into common shares of the Company or repayable in common shares of the Company. A material change report in respect of the EROL Loan will be filed as required, but was not filed 21 days in advance of the closing of the EROL Loan due to the Company’s immediate need for the proceeds of the EROL Loan. The members of the Board other than Mr. Chui have approved the Loan.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 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”, “expects” or “does not expect”, “budget”, “booked”, “scheduled”, “positions”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes” or variations of such words and phrases or state that certain actions, events or results “may”, “may be”, “could”, “should”, “would”, “might” or “will”, “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. 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.