Forterra Environmental Agrees to Merge with Solar Module Manufacturer
18 May 2011 - 7:27AM
PR Newswire (Canada)
PUSLINCH, ON, May 17 /CNW/ -- -- Agreement calls for privately held
OSM Solar Corp. to amalgamate with Forterra through an exchange of
shares -- Shareholders of OSM would receive 90% of shares of
Forterra; plan for an up to 10:1 consolidation of Forterra's issued
and outstanding shares -- Future of Forterra depends on successful
pursuit of strategy to broaden its business into other renewable
sectors of the Canadian marketplace -- OSM's solar modules,
manufactured in Welland, qualify under Ontario's manufacturing
content rules for the FIT program PUSLINCH, ON, May 17 /CNW/ -
Forterra Environmental Corp. (Forterra or the company) (TSXV: FTE),
a manufacturer, marketer, and seller of organic soil amendment
products based on worm castings, today announced that it has
entered into an agreement to merge with OSM Solar Corp.
(OSM). The transaction would constitute a reverse takeover
(RTO) pursuant to the policies of the TSX Venture Exchange. OSM is
a privately held company with its manufacturing plant and head
office in Welland, Ontario. It designs and builds
high-performance solar panels that are used to power businesses,
government and agricultural facilities, and homes. OSM's
solar panels qualify under the Ontario manufacturing content rules
of the province's Feed-In-Tariff (FIT) program. OSM expects
to sell its solar panels in other provinces as well as in the
United States. OSM's management has more than 25 years of
experience in the manufacture of solar panel components. Under the
agreement, Forterra and OSM would carry out an amalgamation
following which all of the issued and outstanding shares of OSM
will be exchanged for common shares of Forterra on a basis such
that the shareowners of OSM will receive shares representing 90
percent of the total number of issued and outstanding shares of
Forterra calculated on a fully diluted basis after giving effect to
the amalgamation and an up to 10:1 consolidation of Forterra's
shares. Current shareholders of Forterra would own 10 percent
of the issued and outstanding shares of the company after the
amalgamation and consolidation are completed. Forterra and OSM are
intending to complete a definitive agreement for the RTO
transaction no later than June 30, 2011 and are targeting to close
the merger by August 31, 2011. Completion of the RTO and
consolidation require the approval of Forterra's
shareholders. The company expects to hold an Annual and
Special Meeting this summer to seek the approval of its
shareholders. Proceeding with the transaction also is subject
to the satisfaction or waiver of a number of other conditions,
including but not limited to the completion of further due
diligence by Forterra and OSM, the consents and approvals of
government and regulatory bodies, including the TSX Venture
Exchange, and the consent of the debentureholders of Forterra to
make their debentures non-interest bearing and to extend their
maturity to December 31, 2012. Following completion of the
amalgamation, it is expected that the Board of Directors of
Forterra will consist of the company's current directors (Don
Green, Bruce Bent, Rod Malcolm, John Gamble, and David Woolford)
and the addition of Dr. Taesung Kim. Dr. Kim is the Chief
Executive Officer of Symphony Energy, a manufacturer of solar
energy modules. OSM's solar energy systems are based on the
use of the Symphony brand of photovoltaic (PV) modules. Dr.
Kim will be taking on increasing responsibilities for OSM's
research and development programs in the future. "For about the
past four years, Forterra has struggled to establish itself as a
company manufacturing, marketing, and selling environmentally
friendly, organic soil enhancers," said Don Green, Chairman and
Chief Executive Officer. "During these years, we have learned
a great deal about the marketplace and refined our products and
production processes. However, we also have made many
mistakes in our learning process and have not managed to make the
business profitable. "Sales did not materialize as
anticipated. Our working capital shortfall worsened
significantly as the company became increasingly indebted, putting
Forterra's future in imminent jeopardy. We became entirely
dependent on loans and certain services supplied by directors and
some shareholders. In view of this and given the inventory on hand,
Forterra reduced operations to a maintenance level. Changes
made included the departure of the company's President and Chief
Operating Officer and other staff reductions," Mr. Green continued.
"We determined that any possible future for Forterra depended on
pursuing a strategy that, if successful, will enable it to
transition and broaden its environmentally friendly business into
other renewable sectors of the Canadian marketplace. Working
particularly with John Gamble, a director of Forterra who also is
serving as Chief Financial Officer, our Board approved pursuing the
amalgamation with OSM, for which Mr. Gamble serves as President
& Chief Executive Officer. "In our view, there is no doubt that
Forterra needs to execute a strategy that broadens our business in
the renewables sector and enables us to recapitalize the company in
order to remain a going concern. As we pursue this strategy through
the completion of the amalgamation with OSM, certain directors and
shareholders of Forterra will continue to provide the short-term
financial support necessary to continue the business through this
difficult time," Mr. Green said. About Forterra Environmental Corp.
Forterra manufactures, markets, and sells environmentally friendly
organic soil amendment products based on worm castings, which boost
fertility while restoring the soil with organic matter for
sustainable, longer-term benefits, including stronger root growth,
and drought and pest resistance. Forterra products contain
only organic material. They are ideal for golf courses,
sports fields, lawn care, parks, nurseries, orchards, and
vineyards. Essentially, Forterra uses red wriggler worms to
convert organic material into vermicompost or worm castings.
Worm castings contain micronutrients, which are required for
healthy plant development. Worm castings also contain
microbes, which increase the rate at which plants take up available
macronutrients and micronutrients. Further information is
available on the company's website at www.forterra.com.
Forward-Looking Statements This news release contains
forward-looking statements based on current expectations.
These forward-looking statements entail various risks and
uncertainties that could cause actual results to differ materially
from those reflected in these forward-looking statements.
Such statements are based on current expectations, are subject to a
number of uncertainties and risks, and actual results may differ
materially from those contained in such statements. These
uncertainties and risks include, but are not limited to,
availability of resources, competitive pressures, changes in market
activity, the ability to sign contracts with customers, the
development of markets for worm castings, its ability to breed and
maintain a sufficiently large worm population, and regulatory
requirements. Risks and uncertainties about Forterra's
business are more fully discussed in the company's disclosure
materials, including its annual information form and MD&A,
filed with the securities regulatory authorities in Canada.
Forterra assumes no obligation to update any forward-looking
statement or to update the reasons why actual results could differ
from such statements. Neither the TSX Venture Exchange Inc. 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. Neither the TSX Venture
Exchange nor its Regulation Services Provider has passed upon the
merits of the proposed RTO transaction. A definitive
agreement between Forterra and OSM for the proposed RTO has not
been signed. There can be no assurance that a definitive
agreement will be signed or that, if signed, the proposed RTO will
be completed. Following the signing of the definitive
agreement, Forterra will issue a news release providing further
details of the proposed RTO. Subsequently, Forterra will
issue a Management Information Circular with respect to the
required Annual and Special Meeting of Shareholders that will be
called to consider the proposed transaction and to approve
Forterra's ongoing corporate and securities law and TSX Venture
Exchange requirements. To view this news release in HTML
formatting, please use the following URL:
http://www.newswire.ca/en/releases/archive/May2011/17/c5453.html p
Investor and Media Relationsbr/ Richard W. Wertheimbr/ Wertheim +
Company Inc.br/ Email: a
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and Settings/Documents and Settings/Documents and
Settings/Documents and Settings/Documents and
Settings/dcampbell/Loca"wertheim@wertheim.ca/abr/ Phone :
416-594-1600br/ Cell : 416-518-8479br/ orbr/ Don Greenbr/
Chairman & Chief Executive Officerbr/ Phone: 905-634-8647br/
Email: a
href="mailto:dmgreen@allstream.net"dmgreen@allstream.net/a /p
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