INFORMATION CIRCULAR
Proposed Merger and Financing
September 18, 2003
InterUnion Financial Corporation ("InterUnion") has entered into a non-binding
Letter of Intent (the "LOI") with BMB Holding, Inc. ("BMB"), a Delaware
corporation with offices in New York and Almaty, Kazakhstan, for the proposed
acquisition by InterUnion of all of the outstanding shares of BMB, which
indirectly holds a 70% interest in the Aksaz, Dolinnoe and Emir oil fields in
Kazakhstan (the "Acquisition").
The proposed Acquisition is subject to certain conditions, including due
diligence, the execution of a definitive agreement and approval of the
Acquisition by the board of directors and shareholders of the respective
companies as well as all regulatory and other approvals.
The terms of the Acquisition provide that InterUnion will issue to the
shareholders of BMB 148,571,249 Common Shares, nominate 4 directors of BMB to
the InterUnion board of directors, will obtain InterUnion shareholders approval
for a share consolidation on the basis of one InterUnion share for ten old
InterUnion shares and will raise up to $10 million ("the Financing"). InterUnion
and BMB expect that the Closing of the Acquisition and of the Financing will
occur on or before October 27, 2003.
BMB has secured the services of Credifinance Securities Limited, of Toronto,
Canada ("Credifinance") as advisor for the Acquisition and to raise a maximum of
$10,000,000. Since interest for investments in the CIS has developed in 1994,
Credifinance has provided expert advice on all aspects of investment banking,
including Toronto Stock Exchange sponsorship, and arranged financing for a
number of US and Canadian oil & gas companies in and around the Caspian Sea.
BMB
BMB Holding, Inc. is an independent company engaged in the exploration,
development, exploitation and production of crude oil and natural gas. The
Company's operations are primarily focused onshore in the hydrocarbon rich
Caspian Sea region of the Republic of Kazakhstan. BMB conducts its operations in
Kazakhstan through a 70%-owned subsidiary, Emir Oil, LLC ("Emir Oil"). Emir Oil
is a limited liability corporation organized under the laws of Kazakhstan.
Emir Oil's principal asset is its licence for the ADE Fields - Aksaz, Dolinnoe
and Emir - located onshore, 45 kilometres northeast of the Caspian Sea port city
of Aktau, in the Mangistau oblast of western Kazakhstan. The ADE hydrocarbon
reserves have been evaluated by PGS Reservoir Consultants of Oslo, Norway. PGS
estimates recoverable reserves in the three fields at 145 million barrels of oil
and 400 billion cubic feet of natural gas (expected case). Of this, reserves
currently in the proved category are estimated at 33 million barrels of oil and
100 billion cubic feet of natural gas.
The directors of BMB who will be nominated to the InterUnion board of directors
are:
o Mr. Boris Cherdabayev: a prominent figure in the Kazakhstan energy
sector, with 30 years experience in the Petroleum industry. Mr.
Cherdabayev has been on the board of directors or has been an
executive of companies such as TCO TengizChevroil; national oil
and gas company Kazakhoil; Uzenmunaygas; Kazakhoil-Emba;
Kazakhstancaspiyshelf; MangistauMunaiGas, Mangyshlakneft;
Karakadukmunai and many other entities;
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o Mr. Bakhytbek Baiseitov, a prominent figure in banking, business
and political circles of Kazakhstan: after starting a brilliant
career at the State Bank of Kazakhstan and being the youngest Head
of the Industrial Department of the Kazakh Republican Office of
the State Bank of the USSR, Mr. Baiseitov founded Bank
CenterCredit, the first private (cooperative) bank in the USSR of
which he was and still is Chairman. Amongst a number of other
positions held in the private and public sectors, Mr. Baiseitov is
also Chairman of Kazakhstan International Bank and President of
The Banking Association of Kazakhstan;
o Dr. Mirgali Kunayev, a prominent figure in the business circles of
Kazakhstan: Chairman of the Board of AralParket, a joint venture
between Parker Drilling, a U.S. drilling company and AralNedra, a
Kazakh company. Dr. Kunayev was a president of
KazakhstanCaspiShelf, a state oil company. He is now on the board
of directors of Bank CenterCredit, several oil & gas services
companies operating on and offshore in the pre-Caspian basin and
serves as Chairman and CEO of a U.S. public company, EMPS
Corporation;
o Dr. Alexandre Agaian: since creating the very first commercial
bank in the USSR in 1988, the Innovation Bank of St. Petersburg,
Dr. Agaian has served as Chairman or director of a number of banks
or financial institutions in Russia and the U.S.
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