Sunshine Oilsands Ltd. is committed to providing our investors and the public with timely and accurate information regarding our business and operating activies.
September 4, 2020
SUPPLEMENTARY ANNOUNCEMENT DISCLOSEABLE TRANSACTION - ASSET DISPOSAL
Hong Kong (September 4, 2020) - The Board of Directors (the “Board”) of Sunshine Oilsands Ltd. (the “Corporation” or “Sunshine”) (HKEX: 2012) wishes to supplement the following information to the announcement issued by the Corporation dated August 8, 2020 (Hong Kong time):
Reference is made to the Corporations’ announcement dated August 8, 2020 (Hong Kong time) (the “Announcement”) in relation to, among other matters, the assets disposal of the Corporation. Capitalized terms used herein shall have the same meaning as those defined in the Announcement, unless defined otherwise.
The Board wishes to supplement the following information.
The Consideration for the Underlying Asset of USD2.85 million (equivalent to approximately CDN $3,812,445) is determined after arm’s length negotiations between the Corporation and the Purchaser, with reference to (i) the Corporation’s internal market research of latest comparable transactions of second-handed gas turbines with similar power specification and heat rate in the last twelve months in Canada. The Consideration was in the range of USD2.0 million to USD 2.9 million; and above average among these comparable transactions; (ii) indicative bids from three potential buyers that the Corporation have been in touch with through the sale agent or staff’s referral, of which the price offered by the Purchaser is the most competitive one; (iii) the assessment of the condition of the Underlying Asset as compared to similar assets available for sale in the market. Given that the Underlying Asset is not very liquid in the market and has been idle for years, the Board considered that the Disposal at such a Consideration was in the interests of the Corporation and its shareholders as a whole rather than keeping it in a rented storage suffering from further deterioration. Taking into account all the above reasons, the Board (including Independent Non-Executive Directors) considered the Consideration for the Disposal is fair and reasonable. The Consideration was settled by cash on Completion.
As at the date hereof, the book value of the Underlying Asset is CDN$4,541,168. As mentioned in the Announcement, given that the Underlying Asset has been held idle in a rented storage, therefore there were no net profit (both before and after tax) attributable to the Underlying Asset for the past two financial years immediately preceding the Disposal.
INFORMATION ABOUT THE PURCHASER
The Purchaser, Steel Reef Infrastructure Corp., is a privately-held midstream company incorporated in Canada with limited liability which invests in strategic small to mid-sized oil and gas infrastructure projects focused in the Western Canadian Sedimentary Basin and Bakken Resource Play. To the best of our knowledge, we are aware that Purchaser are owned by its key directors and they are not connected with the Group or any connected persons of the Group.
About Sunshine Oilsands Ltd.
The Corporation is a Calgary based public corporation listed on the Hong Kong Stock Exchange since March 1, 2012. The Corporation is focused on the development of its significant holdings of oil sands leases in the Athabasca oil sands region. The Corporation owns interests in approximately one million acres of oil sands and petroleum and natural gas leases in the Athabasca region. The Corporation is currently focused on executing milestone undertakings in the West Ells project area. West Ells has an initial production target of 5,000 barrels per day.
For further enquiries, please contact:
Mr. Kwok Ping Sun
Executive Chairman
Tel: (852) 3188 9298
Email: [email protected]
Website: www.sunshineoilsands.com