MCW Energy Group Limited and GeoPetro Resources Company
GPR announced today that their
respective boards of directors have each unanimously approved a
definitive merger agreement whereby MCW has agreed, subject to the
terms and conditions set forth therein, to acquire GeoPetro and
GeoPetro will continue as a subsidiary of MCW.
At the effective time of the merger, each outstanding common share of
GeoPetro will be converted into the right to receive 0.07840916
common shares of MCW and 0.138485 Class B Preferred Shares of MCW,
and each outstanding share of Series B Preferred Stock of GeoPetro
will be converted into the right to receive 0.07840916 Class A Shares
of MCW. The MCW Class A Preferred Shares will have the same
substantive terms as the GeoPetro Series B Preferred Shares with respect to voting rights, the right to receive dividends and the
right to receive distributions upon liquidation. The MCW Class B
Preferred Shares will not have the right to vote or to receive
dividends, nor will the holders thereof have the right to receive
distributions upon any liquidation. During the five years following
the merger, should GeoPetro achieve certain EBITDA targets, the MCW
Class B Preferred Shares shall be automatically converted into common
shares of MCW.
Completion of the transaction is contingent upon, among other things,
shareholder and regulatory approvals, and it is expected to close in
the Summer of 2013. The parties intend to request a hearing before
the California Commissioner of Corporations and the approval of the
Commissioner of the terms and conditions of the merger. Obtaining
such an approval from the Commissioner would qualify the MCW share
issuances for an exemption from the registration thereof under the
U.S. Securities Act of 1933, as amended, and such approval is a
condition to the obligations of the parties to consummate the merger.
One of the conditions to the obligation of MCW to consummate the
merger is that GeoPetro shall have secured, on or before March 29,
2013 (unless extended by MCW, in its sole discretion) $1,900,000 in
equity financing. The merger agreement includes additional customary
representations, warranties and covenants of GeoPetro and MCW.
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