Attention Business/Financial Editors:
AADCO Automotive Inc. - Update
AADCO Automotive Inc. (AA: TSX - Venture Exchange)
15:33 EST Monday, November 26, 2007
TORONTO, Nov. 26 /CNW/ - AADCO Automotive Inc. (TSX-V: AA) (the "Company"). The Board of the Company wishes to provide further details further to its news release of November 19, 2007.
Sale of Assets and Liabilities of Automobile Dismantling Business
Pursuant to an Asset Purchase Agreement dated November 15, 2007, the Company's main operating subsidiary, Aadco Vehicle Disposal Service Inc. ("AVDSI"), has agreed to sell to Quorum Secured Equity Trust and Quorum Investment Pool Limited Partnership (together, the "Asset Purchasers") the assets and liabilities of AVDSI's automobile dismantling business (the "Acquisition"). Consideration for the Acquisition payable by the Asset Purchasers to AVDSI consists of the payment of C$100,000 and the assumption of certain current long and short term obligations associated with the automobile dismantling business. The Asset Purchasers are at arm's length to the Company and AVDSI. The sale was approved by the board of the directors of the Company and AVDSI on November 15, 2007 with Stephen Li and Richard Dole, directors of the Company, abstaining from voting on the approval to the Acquisition by virtue of being board representatives of the Asset Purchasers. On closing the Acquisition in escrow both Stephen Li and Richard Dole resigned from the Board of the Company and were replaced by Phillip Bretzloff.
Purchase of Debentures
The entering into and completion of the Acquisition was conditional upon the Asset Purchasers concurrently selling their long-term debt in AVDSI and the Company. As a result, concurrently with the closing in escrow of the Acquisition, the sale of an aggregate of C$2,950,000 of outstanding convertible debentures (the "Debenture Acquisition") by the Asset Purchasers to certain purchasers (the "Debenture Purchasers") also closed in escrow. The Debenture Purchasers consist of four British Columbia companies which are owned and controlled by Darren Devine, Mathew Wong, Phillip Bretzloff and Ted Kozub, respectively. At the time the Debenture Acquisition was negotiated and entered into, all the Debenture Purchasers were at arm's length to the Company. Immediately subsequent to Debenture Acquisition closing in escrow, Mr. Phillip Bretzloff became a director of the Company as a consequence of being one of the Debenture Purchasers, and since such appointment, he is not at arms-length to the Company. Accordingly, Mr. Bretzloff will not be at arms length on the final completion date when the Acquisition and the Debenture Acquisition are released from escrow and close. Additionally, Darren Devine will be nominated by the Company's management for appointment as a director at the Company's Annual General Meeting to be held on December 28, 2007. Should he be appointed a director, he will not be at arm's length to the Company at the time of completion of the Acquisition and the Debenture Acquisition.
Therefore, upon completion of the various transactions, two of the persons controlling companies which are the Debenture Purchasers, namely Mr. Phillip Bretzloff and Mr. Darren Devine, will be insiders of the Company as a consequence of them being directors of the Company. The other two persons controlling companies which are the Debenture Purchasers, namely Mr. Mathew Wong and Mr. Ted Kozub, will not be insiders of the Company.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
This press release includes forward-looking statements, including statements relating to the Company's sale of its automobile dismantling business. The words "plan", "expect", "believe", "intend", "anticipate", "forecast", "target", "estimate" and similar expressions identify forward-looking statements. Forward-looking statements are based on assumptions made by and information currently available to the Company. Investors are cautioned that these forward-looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected. The Company does not undertake to review or update these forward-looking statements.
%SEDAR: 00009133E
For further information: Tel. (905) 789-9313 x 224, Charles Hodgkinson, CEO, chodgkinson@aadco.ca
