The proposed Reactivation Transaction will be effected by way of an RTO and an information circular will be completed detailing the terms of the Reactivation Transaction and seeking approval from shareholders of NorRock.
As previously disclosed, NorRock intends to treat the LaSalle Acquisition as a related party transaction as defined in Multilateral Instrument 61-101: Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Consequently, NorRock intends to obtain an independent valuation for, and majority of minority shareholder approval of, the LaSalle Acquisition.
NorRock also intends to treat the issuance of shares by NorRock to GTAC pursuant to the transfer of the Highview Note in connection with the Highview Acquisition as a related party transaction pursuant to MI 61-101. NorRock intends to rely on an exemption from the independent valuation requirement set out in MI 61-101; but shall seek majority of the minority shareholder approval of the transfer of the Highview Note.
GTAC is a corporation incorporated in the province of Ontario. Due to the fact that, 50% of the issued and outstanding shares of GTAC is owned by a trust of which Jacqueline Boddaert, a director and officer of NorRock, is a discretionary beneficiary, and 50% is owned by a trust of which a holding company of Adam Gant is a discretionary beneficiary, NorRock intends to treat the transfer of the Highview Note as a related party transaction and voluntary comply with the requirements of MI 61-101.
It is currently anticipated that Malvin Spooner and Gary Brent will join the board of directors of NorRock The officers will include Jacqueline Boddaert, Chief Executive Officer and Raymond Steele, Chief Financial Officer. Biographies of the two anticipated new directors of NorRock are included below.
Malvin Spooner, Director, MA, MBA, CFA - Mr. Spooner was the Founder & President of Mavrix Fund Management Inc. He developed a family of mutual funds and limited partnerships which were distributed through the major banks and MFDA dealers across Canada. He is a former director of CanRock Energy Corp. (merged with Alston Energy Inc. May 2012) and is currently a director with Metals Creek Resources Corp.
Gary Brent, Director - Gary Brent has over 35 years of experience in the asset management industry. In addition to his current role as Co-Founder & Chairman of the HighView Financial Group of Companies - an Oakville based asset management firm serving affluent families, the pensions & investable assets of their businesses, and the foundations & endowments which they support - he was previously the Chairman and Chief Investment Officer of RBC Global Private Banking, the President and Chief Executive Officer of Canada Trust Investment Management Group prior to its sale to TD Bank in 2000, as well as one of the Founding Partners, President, CEO & Vice-Chairman of TAL Private Management prior to the sale of TAL Global Asset Management to CIBC in 1995.
The Reactivation Transaction is conditional upon, among other things, receiving all necessary regulatory and third party approvals and authorizations, the receipt of an independent valuation of the LaSalle Property, approval by the shareholders of NorRock, confirmation of no material adverse change having occurred to the LaSalle Property and Highview prior to close, the completion of definitive agreements setting forth the terms and conditions for the closing of the LaSalle Acquisition and the Highview Acquisition, the completion of due diligence satisfactory to each party, and the completion of a sponsorship report satisfactory to the Exchange (or waiver by the Exchange of that requirement).
NorRock intends to complete a brokered private placement to raise up to $10,000,000 (the "Concurrent Financing") concurrently with its Reactivation Transaction by issuing up to 40,000,000 Class A shares at $0.25 per share. Proceeds raised will be used for acquisitions and general working capital purposes.
NorRock is currently confirming the terms of a sponsorship relationship for this transaction with an Exchange member firm, which will be disclosed as soon as an engagement is formalized.
Post-closing of the Reactivation Transaction and the Concurrent Financing, NorRock will have approximately 74.3 million Class A Shares issued and outstanding. It is anticipated that the current shareholders of NorRock will collectively own approximately 6% of the issued and outstanding voting securities; the subscribers on the Concurrent Financing will collectively own approximately 54% of the issued and outstanding voting securities; IGW Industrial will own approximately 23.2 million Class A Shares, being approximately 31% of the issued and outstanding voting securities of NorRock; and GTAC will own approximately 6,200,000 Class A Shares, being approximately 8% of the issued and outstanding voting securities. As such, IGW Industrial will be an "insider" of NorRock for purposes of applicable securities laws. IGW Industrial GP Inc., the general partner of IGW Industrial, is a subsidiary of League IGW Real Estate Investment Trust, a real estate investment trust established under the laws of the province of British Columbia.
Completion of the transaction is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the securities of NorRock should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
NorRock Realty Finance Corporation
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