Mr. Vikas Ranjan reports
GRAVITAS ANNOUNCES SALE OF PRINCIPLE CAPITAL PARTNERS CORP.
Further to the news release issued on May 28, 2019, announcing the entering into of an accommodation agreement and related sale and investment solicitation process (SISP), Gravitas Financial Inc. has entered into an agreement with Yuhua International Capital Inc. pursuant to which Yuhua will acquire Gravitas's shares of Principle Capital Partners Corp. (formerly Gravitas Mining Corp.), as well as certain receivables, for cash proceeds of $1.15-million.
The proceeds of the transaction will be used in accordance with the accommodation agreement and will permit Gravitas to obtain the needed working capital to continue operations in the short term, as well as further the SISP.
An independent member of the board of Gravitas reviewed the terms of the transaction and determined that it is in the best interest of Gravitas considering, among other things:
- The recommendation of FTI Capital Advisors Canada ULC (FTI), the party assisting with the SISP, after consultation with FAAN Advisors in its capacity as chief process advisor, with FTI advising that the purchase price appears reasonable and appropriate;
- The transaction being supported by the majority holders of Gravitas's secured debt;
- The current financial situation of Gravitas.
The transaction is subject to certain closing conditions and is expected to close on June 13, 2019.
The transactions will constitute a related-party transaction within the meaning of Multilateral Instrument 61-101 (Protections of Minority Security Holders in Special Transactions). However, due to Gravitas's current financial situation, Gravitas is relying on the exemption from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in Section 5.5(g) and Section 5.7(1)(e) of MI 61-101, respectively, on the basis of the financial hardship exemption therein.
The independent member of the board, acting in good faith, has determined that due to Gravitas's current financial situation, the transaction is designed to improve Gravitas's financial position and the terms of the transaction are reasonable in Gravitas's circumstances. As the other board members all disclosed an interest in the transaction, the transaction was approved unilaterally by the independent member.
Gravitas expects to file a material change report in respect of the related-party transaction fewer than 21 days prior to the closing of the transaction, which Gravitas deems reasonable in the circumstances so as to be able to avail itself of the proceeds of the transaction in an expeditious manner.
About Gravitas Financial Inc.
Gravitas Financial is a platform company that creates businesses in key traditional and emerging sectors with strong industry partners. Its industry focus includes financial services and fintech. The company leverages its unique platform to develop a continuous pipeline of new ventures with significant blue-sky potential. Its platform is complemented by strong investment research and digital investment media groups.
We seek Safe Harbor.
© 2020 Canjex Publishing Ltd. All rights reserved.