TSX Venture Exchange Symbol: AAL
VANCOUVER, Feb. 18, 2020 /CNW/ - ADVANTAGE LITHIUM CORP.
(TSXV: AAL) (OTCQX: AVLIF) ("Advantage") is pleased to
announce that it has entered into a definitive arrangement
agreement (the "Arrangement Agreement") with Orocobre
Limited (TSX: ORL) ("Orocobre") pursuant to which
Orocobre will, subject to the terms and conditions of the
Arrangement Agreement, acquire all of the issued and outstanding
common shares of Advantage that Orocobre does not already own by
way of a court-approved plan of arrangement (the
"Arrangement") in exchange for 0.142 common shares of
Orocobre (each whole common share, an "Orocobre Share") for
each common share of Advantage (an "Advantage Share").
Based on the closing price of Orocobre Shares on the Australian
Securities Exchange on February 18,
2020, the consideration represents a premium of
approximately 24% to the closing price of Advantage Shares on
February 14, 2020, the last trading
day of Advantage Shares prior to the announcement of the
Arrangement, and a premium of approximately 35% based on the
trailing 20-day volume-weighted average price of Advantage as of
the close of trading on February 14,
2020.
Arrangement Overview
The Arrangement will be carried out by way of a court-approved
plan of arrangement under the provisions of the Business
Corporations Act (British
Columbia). Under the terms of the Arrangement,
Advantage shareholders will receive 0.142 an of an Orocobre Share
for each Advantage Share held (such exchange ratio being
hereinafter referred to as the "Exchange Ratio") resulting
in the issuance of approximately 15.1 million Orocobre Shares in
exchange for 106 million Advantage Shares (excluding approximately
56.5 million Advantage Shares currently held by Orocobre). In
addition, (i) each outstanding Advantage option will be assigned
and transferred to Orocobre in exchange for the issuance of a
number of Orocobre Shares as is equivalent in value to the amount
the consideration issued in respect of an Advantage Share exceeds
the exercise price of such option and (ii) each outstanding
Advantage restricted share unit will be redeemed in exchange for
the issuance to each such holder of such number of Orocobre Shares
as is equal to the consideration to which such holder would have
been entitled had such RSUs been redeemed for Advantage Shares.
Total share consideration is valued at approximately $69 million based on prices at the close of
trading on February 14, 2020.
Completion of the Arrangement is subject to approval by the
Supreme Court of British Columbia
and the affirmative vote of Advantage shareholders at a special
meeting that is expected to be held in April
2020 (the "Meeting"). At the Meeting, the
Arrangement will require approval by at least two-thirds (66⅔%) of
the votes cast by Advantage shareholders present in person or
represented by proxy and entitled to vote at the Meeting. The
Arrangement will also require minority approval in accordance with
Multilateral Instrument 61-101 ("Minority Approval").
The votes attaching to the Advantage Shares owned by Orocobre and
certain other persons will be excluded for the purposes of
determining whether Minority Approval is achieved.
Pursuant to the terms of the Arrangement Agreement, the
Arrangement is also subject to customary conditions, including
support of the transaction by directors, officers and significant
shareholders of Advantage, and receipt of applicable regulatory and
third party approvals and consents as may be required to effect and
complete the transaction, including approval of the Toronto Stock
Exchange (in respect of Orocobre) and the TSX Venture Exchange (in
respect of Advantage). The Arrangement Agreement also
provides for a payment of a termination fee of C$1,000,000 by Advantage to Orocobre in certain
circumstances where the transaction is not completed.
The board of directors of Advantage (the "Advantage
Board") (with interested directors abstaining), after
receiving the unanimous recommendation of the special committee of
the Advantage Board created to consider matters relating to the
Arrangement, has unanimously determined that the Arrangement is
fair to Advantage shareholders and is in the best interests of
Advantage. Accordingly, the Advantage Board approved the
Arrangement and recommends that Advantage shareholders vote their
Advantage Shares in favour of the Arrangement. In making its
recommendation, the Advantage Board considered a number of factors,
including the receipt by the Advantage Board of a fairness opinion
from Fort Capital which determined that the consideration offered
to Advantage shareholders pursuant to the Arrangement is fair, from
a financial point of view, to Advantage shareholders.
All of the directors and officers of Advantage and certain
significant shareholders of Advantage (who hold in the aggregate
approximately 11.6% of the issued and outstanding Advantage Shares
on a non-diluted basis) have entered into support agreements with
Orocobre pursuant to which they have agreed, among other things, to
support the transaction and vote their Advantage Shares in favour
of the Arrangement.
Assuming that all requisite approvals are received, Orocobre and
Advantage expect to close the proposed Arrangement shortly after
the date of the Meeting. Upon completion, all of the members of the
Advantage Board will resign and the current management team of
Orocobre will manage Advantage after completion of the
Arrangement.
The terms of the Arrangement will be described in further detail
in the Management Information Circular of Advantage to be filed
with regulatory authorities and mailed to Advantage shareholders in
March 2020 in accordance with
applicable securities laws.
Advantage security holders and other interested parties are
advised to read the materials relating to the proposed Arrangement,
including the Arrangement Agreement that will be filed by Advantage
with securities regulatory authorities in Canada when they become available.
Anyone may obtain copies of these documents when available
free of charge at the Canadian Securities Administrators' website
at www.sedar.com.
Fort Capital Partners acted as financial advisor to the special
committee of Advantage. McMillan LLP acted as legal counsel to
Advantage.
This announcement is for informational purposes only and does
not constitute a solicitation or a proxy.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities. The
securities have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "U.S.
Securities Act"), or any state securities laws and may not be
offered or sold within the United
States or to, or for the account or the benefit of, U.S.
persons (as defined in Regulation S under the U.S. Securities Act)
unless registered under the U.S. Securities Act and applicable
state securities laws or an exemption from such registration is
available.
Neither 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.
Further information about the Company can be found at
www.advantagelithium.com.
About Advantage
Advantage Lithium Corp is focused on developing its 75% owned
Cauchari lithium project, located in Jujuy Province,
Argentina. The Company also owns 100% interest in additional
and prospective lithium exploration properties in Argentina: Antofalla, Incahuasi, and
Guayatayoc having a combined area of ~72,000ha. The Company is
headquartered in Vancouver, British
Columbia and trades on the TSX Venture Exchange (TSX-V: AAL)
and the OTCQX Best Market in the U.S. (OTCQX: AVLIF).
ON BEHALF OF THE BOARD OF DIRECTORS OF ADVANTAGE LITHIUM
CORP.
"Callum Grant"
Callum Grant
Interim CEO
Cautionary Statement:
Certain information in this news release is considered
forward-looking within the meaning of certain securities laws and
is subject to important risks, uncertainties and assumptions. This
forward-looking information includes, among other things,
information with respect to the Company's beliefs, plans,
expectations, anticipations, estimates and intentions. The words
"may", "could", "should", "would", "suspect", "outlook", "believe",
"anticipate", "estimate", "expect", "intend", "plan", "target" and
similar words and expressions are used to identify forward-looking
information. The forward-looking information in this news release
describes the Company's expectations as of the date of this news
release. Forward-looking statements in this news release include,
but are not limited to statements with respect to the anticipated
timing for the meeting of Advantage shareholders and the
closing of the Arrangement, the anticipated consideration to be
received by Advantage shareholders, the satisfaction of closing
conditions including: (i) required Advantage shareholder approval;
(ii) necessary court approval in connection with the Arrangement;
(iii) certain termination rights available to the parties under the
Agreement; (iv) Advantage obtaining the necessary approvals from
the TSX-V; and (v) other closing conditions, including, without
limitation, the operation and performance of the Advantage business
in the ordinary course until the closing of the Arrangement and
compliance by Advantage with various covenants contained in the
Agreement.
The results or events anticipated or predicted in such
forward-looking information may differ materially from actual
results or events. Material factors which could cause actual
results or events to differ materially from such forward- looking
information include, among others, risks arising from general
economic conditions; adverse industry events; inability to realize
anticipated synergies; future legislative and regulatory
developments; inability to access sufficient capital from internal
and external sources, and/or inability to access sufficient capital
on favourable terms; income tax and regulatory matters; the ability
of Advantage and Orocobre to implement their business strategies;
competition; currency and interest rate fluctuations and other
risks. Readers are cautioned that the foregoing list is not
exhaustive.
The Company cautions that the foregoing list of material factors
is not exhaustive. When relying on the Company's forward-looking
information to make decisions, investors and others should
carefully consider the foregoing factors and other uncertainties
and potential events. The Company has assumed a certain
progression, which may not be realized. It has also assumed that
the material factors referred to in the previous paragraph will not
cause such forward-looking information to differ materially from
actual results or events. However, the list of these factors is not
exhaustive and is subject to change and there can be no assurance
that such assumptions will reflect the actual outcome of such items
or factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE
REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS
NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH
DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING
INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY
OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE
TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME.
SOURCE Advantage Lithium Corp