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Sunshine Oilsands Ltd. is committed to providing our investors and the public with timely and accurate information regarding our business and operating activies.
December 5, 2019

ISSUE OF SHARES UNDER GENERAL MANDATE FOR SETTLEMENT OF TRADE CREDITOR

Hong Kong (December 5, 2019) / Calgary, Alberta (December 5, 2019) - The Board of Directors (the “Board”) of Sunshine Oilsands Ltd. (the “Corporation” or “Sunshine”) (HKEX: 2012) wishes to announce the following:

 

ISSUE OF SHARES UNDER GENERAL MANDATE FOR SETTLEMENT OF TRADE CREDITOR

 

On Hong Kong (December 5, 2019) / Calgary, Alberta (December 5, 2019), the Corporation entered into the Settlement Agreement with the Trade Creditor, being an Independent Third Party and a trade creditor to the Corporation, pursuant to which the Corporation will allot and issue the Relevant Shares to the Trade Creditor as full and final settlement of the Trade Payable.

 

The Issue Price is HK$0.0524, which represents

 

(i) a discount of approximately 9.97% as to the average closing price of HK$0.0582 per Share as quoted on the Hong Kong Stock Exchange for the last five consecutive trading days immediately prior to and including December 4, 2019; and

 

(ii) a discount of approximately 9.66% to the closing price of HK$0.058 per Share as quoted on the Hong Kong Stock Exchange on December 5, 2019.

 

The Relevant Shares, which shall rank pari passu in all respect with the existing Shares, will be allotted and issued under the General Mandate. The Corporation will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in the Relevant Shares. Up to the date of this announcement, the Board has allotted and issued 196,318,480 Shares under the General Mandate. No shareholders’ approval is required for the allotment and issue of the Relevant Shares.

 

Shareholders and potential investors should note that completion of the Issuance is subject to fulfilment of the conditions under the Settlement Agreement. As the Issuance may or may not proceed, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

 

ISSUANCE OF RELEVANT SHARES

 

Pursuant to the Settlement Agreement entered into between the Corporation and the Trade Creditor on Hong Kong (December 5, 2019) / Calgary, Alberta (December 5, 2019), the Corporation will allot and issue the Relevant Shares at the Issue Price to the Trade Creditor as full and final settlement of the Trade Payable.

 

THE RELEVANT SHARES

 

Assuming no further issue of new Shares or repurchase of Shares (other than those failing to be issued upon full exercise of the share options), the Relevant Shares represent (i) approximately 0.81% of the existing issued share capital of the Corporation as at the date of this announcement; and (ii) approximately 0.81% of the total enlarged issued share capital of the Corporation immediately following completion of the Issuance.

 

ISSUE PRICE

 

(i) a discount of approximately 9.97% as to the average closing price of HK$0.0582 per Share as quoted on the Hong Kong Stock Exchange for the last five consecutive trading days immediately prior to and including December 4, 2019; and

 

(ii) a discount of approximately 9.66% to the closing price of HK$0.058 per Share as quoted on the Hong Kong Stock Exchange on December 5, 2019.

 

It was arrived after arm’s length negotiation between the Corporation and the Trade Creditor with reference to the market condition and the prevailing market price of the Shares.

 

GENERAL MANDATE TO ISSUE THE RELEVANT SHARES

 

The Relevant Shares will be allotted and issued pursuant to the General Mandate and the issue of the Relevant Shares is not subject to Shareholders’ approval. The maximum number of Shares that can be issued under the General Mandate is 1,227,169,324 Shares. Up to the date of this announcement, the Board has allotted and issued 196,318,480 Shares under the General Mandate. No shareholders’ approval is required for the allotment and issue of the Relevant Shares.

 

RANKING AND APPLICATION FOR LISTING

 

The Relevant Shares will be issued under the General Mandate and will rank pari passu in all respects among themselves and with the existing Shares in issue on the Completion Date. Application will be made to the Stock Exchange for the grant of the listing of, and permission to deal in the Relevant Shares.

 

CONDITIONS

 

Completion of the Settlement Agreement shall be subject to and conditional upon the following:

 

(i) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in the Relevant Shares; and

 

(ii) all relevant approvals and consents from governmental or other competent authority or in accordance with applicable laws having been obtained, if necessary.

 

None of the above conditions are capable of being waived. In the event that the conditions of the Issuance are not fulfilled on or before December 19, 2019 (or such other time and date as may be agreed between the parties to the Settlement Agreement), the Settlement Agreement shall cease and determine and neither the Corporation nor the Trade Creditor shall have any obligations and liabilities under the Settlement Agreement.

 

EFFECTS ON SHAREHOLDING STRUCTURE OF THE CORPORATION

 

As at the date of this announcement, the Corporation has 6,353,945,006 Shares in issue. The shareholding structure of the Corporation as at the date of this announcement and immediately after completion of the Issuance (assuming that there are no other changes to the shareholding structure of the Corporation from the date of this announcement to the date of completion of the Issuance) are as follows:

Note:
(1) The above figure does not include 990,347,263 new Shares to be allotted and issued upon the full conversion of the CB pursuant to the Subscription Agreement per the announcement dated June 16, 2019 and supplemented by the announcement dated June 17, 2019.

 

REASONS FOR AND BENEFITS OF ENTERING INTO THE SETTLEMENT AGREEMENT

 

As at the date of the Settlement Agreement, the Corporation has a Trade Payable balance of CDN$ 456,998.40 (approximately HKD 2,705,733.57) with the Trade Creditor, this Trade Payable will be fully settled by the Issuance.


The Directors are of the view that the settlement of the Trade Payable by way of Issuance would not result in significant cash outflow of the Corporation while reducing the indebtedness of the Corporation. Accordingly, the Directors consider that the terms of the Settlement Agreement are fair and reasonable and the Issuance is in the interests of the Corporation and its Shareholders as a whole.

 

FUND RAISING ACTIVITIES OF THE CORPORATION IN THE PAST 12 MONTHS


Save as disclosed below, the Corporation has not conducted any other fundraising activities during the 12 months immediately preceding the date of this announcement.

 

Shareholders and potential investors should note that completion of the Issuance is subject to fulfilment of the conditions under the Settlement Agreement. As the Issuance may or may not proceed, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.