Winalta Inc. Announces the Acquisition of Envirocore's Construction Assets
Winalta Inc. announced today the signing of an agreement to acquire the assets of Envirocore, a division of IROC Energy Services Partnership. Located in Fort St John, BC, Envirocore operates as a construction company primarily in lease and road construction for the oil and gas industry. The assets include all lease construction associated equipment and inventories currently operated by IROC’s Envirocore division. Winalta has entered into an agreement to retain certain key Envirocore employees and has offered employment contracts to all current Envirocore employees.
“I don't believe I have seen a more opportune time to expand by acquisition in the oilfield services sector. Though these are challenging economic times, northeastern British Columbia is an area that has maintained reasonable drilling activity and is an important strategic region in which we see further expansion and growth opportunities. Discipline, patience and a redeployment of capital from the home division into the oilfield service industry will be Winalta’s strategy going forward”, says Artie T. Kos, President and CEO.
The $4.8 Million purchase price consists of $3.3 Million cash and $1.5 million held by IROC as a vendor take back to be repaid over 2 years.
In connection with the financing of the Envirocore asset acquisition, Winalta inc. has secured a bridge loan from Kos Corp Investments Ltd., a company owned by Artie Kos, a director and President and Chief Executive Officer of Winalta Inc., in the amount of $1 Million. The terms of this related party transaction have been reviewed and approved by the independent directors of Winalta Inc. The terms of the bridge facility provided by Kos Corp Investments Ltd. are based on terms customary for bridge loan facilities of this type and include interest at 12% per annum and a $10,000 transaction fee. The bridge loan has a 6 month term. The bridge loan was necessary as negotiations for the placement of permanent debt financing have taken longer than expected to complete due to tightening in the credit markets. The bridge loan will be repaid upon Winalta securing such permanent debt financing. Additional funds will come from a credit facility secured by a third party lender, advances under which will be available prior to closing of this transaction.
Winalta Inc. is a fully integrated company with two main divisions: Industrial and Homes. The Industrial Division manufactures and leases industrial accommodations, provides construction services that include excavating, aggregate trucking and paving. The Homes Division manufactures CSA approved homes, develops land and builds communities.
Winalta Inc. shares trade on the TSX Venture Exchange under the symbol "WTA.A".
For further information:
Business Contact
Artie T. Kos
President & CEO
Winalta Inc.
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Tel: (780) 960-6900
Fax: (780) 962-9523
www.winaltainc.com
Austin Fraser
VP Corporate Development and Investor Relations
Tel: (403) 475-4698
