Attention Business/Financial Editors: |
ST. GENEVIEVE ASSOCIATES ITSELF WITH BEAU CANADA IN THE
REVIVAL OF GENOIL
MONTREAL, March 6 /CNW/ - St. GeneviŠve Resources Ltd. (''SGV'')
announces that it has concluded an agreement with Beau Canada Exploration Ltd.
(''Beau'') pursuant to which the operations of Genoil Inc. (''Genoil'') have
been refinanced and the indebtedness of SGV to Genoil has been settled.
Beau has subscribed for a total of 16,845,501 common shares of Genoil for
an aggregate subscription price of $3,369,100.20. In addition, Beau has
provided to Genoil a loan in the amount of approximately $3.5 million in order
to cover Genoil's financial obligations in connection with the Ana Maria no. 2
well located in Cuba, expected to be drilled in the last half of 1998.
SGV has agreed to reimburse the $5.6 million owed to Genoil by no later
than April 1, 1999, with interest to accrue at prime plus 1 %. As security
for the repayment of this indebtedness and certain other indebtedness owing by
Genoil to Beau, SGV has pledged to Genoil the 5.28 million shares of Genoil
which it holds, as well as an account receivable of equal value which is owed
to SGV by KWG Resources Inc. In addition, SGV has granted to Beau the option
to purchase the shares of Genoil held by it at a price of $1.00 per share for
a period of 18 months. However, SGV retains the right to sell these shares on
the market at a minimum price of $1.00 per share. In all cases, the proceeds
of such sale will be applied toward the repayment of SGV's indebtedness to
Genoil. The voting rights attaching to these shares have been transferred to
Beau for as long as the option remains in effect.
As a key feature to this transaction, SGV and Beau have reached an
agreement with Genoil, whereby SGV could earn the following farm-in rights :
I. the right to earn up to a 17.5% interest in Blocks 19 and 20, in
consideration of the payment of up to 17.5% of the historical costs
on such Blocks; and
II. the right to earn up to a 5% interest in Blocks V, VI and VII, in
consideration of the payment of up to 10% of the cost of a new well
to be drilled on such Blocks.
Following the conclusion of these transactions, the management and
direction of Genoil was transferred to Beau, whose experience in the oil and
gas sector is expected to prove to be a valuable asset to Genoil.
The Chairman of the Board of St. GeneviŠve, Mr. Pierre R. Gauthier,
stated : ''The conclusion of this transaction represents an important step for
SGV in the implementation of its restructuring plan.''
SGV is a mining exploration company currently trading (without quotation)
on the Canadian Dealing Network under the symbol SGVE.
NO REGULATORY AUTHORITY HAS APPROVED NOR DISAPPROVED
THE CONTENT OF THIS PRESS RELEASE
For further information: Jacques Rossignol, Lapointe Rosenstein,
ST. GENEVIEVE RESOURCES LTD has 2 releases in this database.