2013-10-28 15:53:13 -
Montreal, Quebec CANADA, October 28, 2013 /FSC/ - Blue Zen Memorial Parks Inc. (BZM - CNSX), ("Blue Zen" or the "Company"), is pleased to provide its shareholders with this corporate update.
Reference is made to the Company's Press Release of August 12, 2013, in which it was announced that the Company's Board of Directors and management "are reviewing options to bring more industry expertise into its governance and management structure as well as greater access to capital and operational resources."
The Board of Directors has approved a Share Purchase Agreement ("Agreement") pursuant to which one of the Company's principal shareholders, namely Sun Enterprises Group Ltd. ("SEG"), has agreed to sell and to cause its member company, Sun Thinktank Creative Holdings
Ltd., to sell a total of 11,250,000 common shares ("Shares") in the capital of Blue Zen, representing all of its holdings in Blue Zen, to Mr. Albert Barbusci, a current shareholder of Blue Zen, in a private transaction. The transaction effectively assigns majority control of Blue Zen to two principal shareholders - Jiangsu Tiandilong Land Resource Technology Co. Ltd. ("TDL"), which currently owns 11,250,000 shares, and Mr. Barbusci - a move which will effectively enable TDL's CEO and principal owner, Mr. Jiaping Jiang, with the support of Mr. Barbusci, to work toward the acquisition of a copper mining asset by BZM and converting the Company into a publically-owned mineral exploration and development enterprise.
The transfer of control from SEG will allow Mr. Jiang and the rest of the Board to review the composition of the Board and executive management of Blue Zen and its operating subsidiaries in order to ensure that, as a group, they will possess the experience and leadership capabilities congruent with the Company's new strategic focus as well as enable Blue Zen to have access to mining assets, trading operations, and capital resources. Says Mr. Jiang, "We will now be in the mining and development business and not be distracted by other pursuits. I am committed to finding the right asset, putting together the right team, and executing the Company's new business strategy."
SEG, having either directly or through affiliated parties financed the activities of Blue Zen through the issuance of working capital loans and advances totalling $1,434,000, and having previously made commitments to finance Blue Zen's continued operating expenses (the "Commitment"), has assigned that Commitment to Mr. Barbusci. Messrs. Barbusci and Jiang have agreed that they will make available to Blue Zen, on a 50/50 basis, sufficient funds to cover all basic operating expenses of Blue Zen in order to maintain its status as a reporting issuer. In consideration for accepting the Commitment, Mr. Barbusci will be assigned by SEG a total of $751,000 in payables that are owed to SEG by Blue Zen (the "Payables").
Concurrent with the assignment of the Payables to Mr. Barbusci, SEG has agreed to settle the remaining amount of $683,000 owed to it by Blue Zen through the issuance, subject to regulatory approval, by Blue Zen of an interest-bearing note in the principal amount of $600,000 to SEG, which Blue Zen promises to pay to SEG on May 1, 2016 (the "Maturity Date"). Blue Zen may, at its option, and at any time prior to the Maturity Date, elect to convert the principal as well as any accrued and unpaid interest outstanding into common shares in the capital of Blue Zen.
Pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the issuance of the note to SEG constitutes a "related party transaction" in that SEG held securities carrying more than 10% of the voting rights attached to all of the Company's outstanding voting securities at the time the transaction was agreed to. The Company is exempt from the formal valuation requirement of MI 61-101 in connection with such issuance in reliance on section 5.5(b) of MI 61-101, as no securities of the Company are listed or quoted for trading on the Toronto Stock Exchange, the New York Stock Exchange, the American Stock Exchange, the NASDAQ stock market or any other stock exchange outside of Canada and the United States. Additionally, the Company is exempt from obtaining minority shareholder approval in connection with the note issuance in reliance on section 5.7(1)(b) of MI 61-101 as, in addition to the foregoing, (i) neither the fair market value of the note issuable to SEG nor the consideration received in respect thereof exceeds CDN$2.5 million, (ii) the Company has one or more independent directors in respect of the note issuance who are not employees of the Company, and (iii) all of the independent directors have approved the note issuance.
In connection with the SEG transaction, SEG's nominee directors and officers will resign, including CEO and Chairman Xianming Kong, director Ben Wu, China-based CFO Edward Zhao, and China-based COO Carla Zhou. Mr. Jiaping Jiang will remain as director, and existing Canadian director Barry Sheehy will assume the position of Interim CEO and Chairman. Mr. Paul Yaphe, also of Canada, will assume the third board position. North American CFO Robert Lupacchino will assume the position of Corporate CFO and Secretary. Planning is underway by Mr. Jiang and the Board to review and reconstitute the full Board of Directors and management team as quickly as possible.
The Company is tentatively planning to conduct a shareholder meeting in the first quarter of 2014, at which time shareholders will consider and vote on any proposed asset acquisition and any proposed restructuring to the Company's directors and/or management team.
While the Company is working hard to effect the appropriate changes in its management structure and consolidate its focus on the mining sector, there can be no guarantee that the injection of a suitable mining asset will occur.
There are 36,401,420 common shares of Blue Zen issued and outstanding.
Safe Harbor Statement
This news release contains statements that constitute "forward-looking information" or "forward-looking statements" within the meaning of applicable securities legislation. This forward-looking information is subject to numerous risks and uncertainties, certain of which are beyond the control of Blue Zen Memorial Parks Inc. Actual results or achievements may differ materially from those expressed in, or implied by, this forward-looking information. No assurance can be given that any events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that Blue Zen will derive there from. Forward-looking information is based on the estimates and opinions of Blue Zen's management at the time the information is released and Blue Zen does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
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Source: Blue Zen Memorial Parks Inc. (CNSX: BZM)
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