Birch Lake Energy Inc. (TSXV:BLK) and Veraz Petroleum Ltd. (TSXV:VRZ.H) announced that as per an arrangement agreement, Birch Lake will acquire all of Veraz’s issued and outstanding common shares. The transaction must be approved by a variety of entities, including Veraz shareholders, the TSX Venture Exchange and the Court of Queen’s Bench of Alberta, and is expected to close on December 21, 2012.
As quoted in the press release:
Under the terms of the Arrangement Agreement, Veraz shareholders will receive 0.112100125 of a Birch Lake common share for every one (1) Veraz common share. The Transaction will be undertaken by means of a plan of arrangement (the “Arrangement“) under the Business Corporations Act (Alberta). Birch Lake will issue approximately 6.0 million common shares to Veraz shareholders. The Arrangement Agreement contemplates that Veraz will hold a meeting of its shareholders on or prior to December 20, 2012 to permit Veraz shareholders to vote on the Arrangement.
Upon completion of the Transaction (and before the completion of Birch Lake’s proposed financing of common shares and flow-through shares for gross proceeds of up to $2,000,008), Birch Lake expects to have a total of approximately 57,941,217 common shares issued and outstanding (of which former shareholders of Veraz will hold approximately 10.4%) and $2.3 million in cash (in addition to any funds received through the proposed financing).