Western Potash Corp., Vancouver, today reported Beijing Tairui Innovation Capital Management Ltd. (Tairui) has agreed to make a strategic equity investment of C$80 million in Western at a price of C$0.3213 per common share of Western for a total of 248,989,860 common shares in the capital of Western, subject to adjustment, which will result in Tairui holding a 51 percent ownership stake in the company on a non-diluted basis on closing of the transaction. The per share issue price of C$0.3213 represents a 46 percent premium over the company’s volume weighted average price on the Toronto Stock Exchange for the 30 trading days ended July 3, 2015.
Under the terms of the investment, Tairui will have the right to appoint four nominees to the board of directors of the company. In addition, the investment agreement provides that the number of common shares issuable to Tairui and the per share issue price of C$0.3213 based on 248,989,860 common shares, are subject to adjustment in certain circumstances where additional common shares may be issued on or prior to closing, such that Tairui will, in all such circumstances, hold a 51 percent ownership stake in the company on a non-diluted basis on closing.
The adjustment provisions include adjustments in the event that CBC (Canada) Holding Corp. (CBCHC) elects to exercise, in whole or in part, and within the prescribed time limit, its pre-emptive right to maintain up to a 19.9 percent share position in Western pursuant to the subscription agreement between CBCHC and the company dated June 1, 2013.
It is anticipated that closing will take place on or about Aug. 31, 2015. Proceeds from the investment will be used for the development of the pilot plant scale selective solution mining operation in accordance with a previously announced positive scoping study on the company’s 100 percent owned Milestone property in southern Saskatchewan.