The Approval and Vesting Order approved the previously announced transactions (collectively, the 'Transaction') contemplated in the sale proposal structured as a credit bid from a group made up of the Corporation's largest secured creditor, Orion Mine Finance ('Orion'),
The Approval and Vesting Order also approved the implementation of a reorganization of the Nemaska Entities that involves: (a) the incorporation of two new entities (collectively, 'Residual Nemaska Lithium') to ultimately hold certain excluded liabilities of the Nemaska Entities, certain excluded cash of the Corporation on hand at closing, subject to certain adjustments (the 'Residual Cash'), and certain excluded assets (the 'Excluded Assets'), and (b) the exchange of the shares of the Corporation, on a one-for-one basis for common shares of Residual Nemaska Lithium (the 'Exchange'), that will result in Residual Nemaska Lithium becoming a successor reporting issuer under applicable Canadian securities laws.
The Approval and Vesting Order will enable Residual Nemaska Lithium to submit a joint plan of compromise and arrangement and to call a creditors' meeting to vote on such plan. Such meeting will be called shortly after the closing of the Transaction.
The Excluded Assets include, among other things, 15,000,000 common shares in the capital of
Exchange of shares
The Exchange will occur on the date that is four business days before the closing date of the Transaction. At the same time all issued and outstanding options, warrants or other securities of the Corporation (including securities convertible, exchangeable or exercisable for shares of the Corporation) shall be canceled for no consideration. Following the Exchange, each share certificate (or other evidence of ownership of shares of the Corporation) representing shares of the Corporation shall be deemed to represent for all purposes the same number of common shares of Residual Nemaska Lithium. Accordingly, shareholders will not be required to surrender their share certificates representing shares of the Corporation and in the context of the Transaction, since there is no residual value for shareholders, no action is required from shareholders to complete the Exchange.
The Corporation will confirm by press release once the Exchange occurs. All non-residents of
Tax Considerations of the Exchange
The following section provides a general summary of certain Canadian federal tax considerations to beneficial owners of common shares of the Corporation (the 'Shares') who, for the purposes of the Income Tax Act (
For purposes of the Tax Act, the Exchange will generally not result, pursuant to subsection 85.1(1) of the Tax Act, in a Canadian Holder realizing a capital loss. A Canadian Holder may, however, elect to realize a capital loss upon the Exchange by including in its return of income for the taxation year in which the Exchange occurred the capital loss, as otherwise determined, resulting from the Exchange.
This summary does not discuss all of the tax considerations potentially applicable to Canadian Holders or to other holders of shares and all holders should consult their own tax advisors as to the federal, provincial and foreign tax considerations applicable to them having regard to their own circumstances.
Cautionary Statement on Forward-Looking Information
All statements, other than statements of historical fact, contained in this press release including, but not limited to, those relating to the CCAA proceedings, the Transaction and the Corporation's activities and its ability to meet its obligations, constitute 'forward-looking information' and 'forward-looking statements' within the meaning of certain securities laws and are based on expectations and projections as of the date of this press release. Certain important assumptions by the Corporation in making forward-looking statements include, but are not limited to, satisfaction of all closing conditions under the Transaction during the fourth quarter of 2020.
Forward-looking statements contained in this press release include, without limitation, those related to the ability of the Corporation to close the Transaction and the timing of closing, the value of the common shares of
Many of these uncertainties and contingencies can directly or indirectly affect, and could cause, actual results to differ materially from those expressed or implied in any forward-looking statements. In addition, there can be no assurance that the CCAA proceedings will result in the maximization of the return in respect of the Corporation's assets and those of its subsidiaries.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking statements will not be achieved or that assumptions do not reflect future experience. Forward-looking statements are provided for the purpose of providing information about management's expectations and plans relating to the future. Readers are cautioned not to place undue reliance on these forward-looking statements as a number of important risk factors and future events could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates, assumptions and intentions expressed in such forward-looking statements. All of the forward-looking statements made in this press release are qualified by these cautionary statements and those made in our other filings with the securities regulators of
Contact:
Tel: 514 348-0466
Email: gabrielle.tellier@nemaskalithium.com
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