Press Release
Source: Loretta Food Group Inc.
Dundee Securities and Raymond James to Co-Lead Proposed C$3,000,000 Private
Placement for Loretta Food Group
Loretta also Executes Letter Agreement with a Capital Pool Company and
Sponsorship Agreement with Raymond James
Mississauga, Ontario -- April 20, 2005 - Loretta Food Group Inc. ("LFG" or the
"Company"), announced today that it has executed a letter of engagement (the
"Engagement Letter") pursuant to which Dundee Securities Corporation ("Dundee")
and Raymond James Ltd. ("Raymond James") have agreed to sell, on a best efforts
basis by way of a private placement (the "Private Placement"), a minimum of
5,555,400 to a maximum of 11,111,100 subscription receipts ("Subscription
Receipts") of the Company at a purchase price of $0.27 (Canadian Dollars) per
Subscription Receipt for gross proceeds of up to approximately $3,000,000.00
(Canadian Dollars), pursuant to available prospectus exemptions under applicable
securities laws in the relevant jurisdictions, including, but not limited to,
Regulation S of the Securities Act of 1933, as amended. The net proceeds from
this private placement are anticipated to be used to fund the Company's growth
strategy, emphasizing brand positioning and market development in Canada and the
United States, and for general working capital purposes.
Each three (3) Subscription Receipts will entitle the holder to receive, for no
additional consideration, one share of the Company's common stock ("Common
Share") or in certain circumstances, 1.1 Common Shares.
"We welcome the opportunity to have both Dundee and Raymond James co-lead our
private placement financing", stated Al Burgio, Chairman & CEO of LFG. "The net
proceeds from this financing will provide our company with additional resources
that should enable us to continue to expand our presence in Canadian and US
markets."
LFG also announced today that it has entered into a letter agreement (the
"Letter Agreement") with CPVC Tremblant Inc. ("Tremblant" or the "CPC"), an
Alberta corporation, and certain holders of the Company's common stock, as well
as the holders of the Class A preferred shares ("Class A Preferred Shares") of
Monaco (Canada) Inc. ("MCI") and the Exchangeable Shares ("Exchangeable Shares")
of MG Holdings Inc. ("MGH"), both wholly-owned subsidiaries of the Company.
Pursuant to the terms and conditions of the Letter Agreement, Tremblant shall
acquire all the issued and outstanding Common Shares of LFG, the Class A
Preferred Shares of MCI, and the Exchangeable Shares of MGH (the "Acquisition"
or as it pertains to Tremblant, the "Reverse Takeover"). The Acquisition is
expected to constitute a Qualifying Transaction ("Qualifying Transaction") for
Tremblant as defined in Policy 2.4 of the TSX Venture Exchange Inc. ("TSX
Venture") Corporate Finance Manual.
Tremblant has also agreed to continue under the laws of Canada (the
"Continuance"), to change its name to a name to be determined by LFG (the
"Change of Name"), and after completion of the Acquisition, to consolidate its
post-acquisition common shares on the basis of one new common share for each
five existing common shares (the "Consolidation"), all subject to shareholder
and regulatory approval.
"Our company has planned to become publicly-listed on a recognized stock
exchange and this Reverse Takeover is an ideal and expeditious avenue for LFG to
become a publicly-traded company in Canada. We believe that this will enhance
the market awareness for our company and provide us with ongoing access to the
capital markets, as we continue to seek acquisition and expansion opportunities
within the food industry," stated Mr. Burgio. "The Reverse Takeover of Tremblant
is expected to provide us with an additional capital infusion of approximately
$1.5 million (Canadian Dollars), after projected costs associated with the
Acquisition. Therefore, as a result of the maximum Private Placement and the
Reverse Takeover, LFG is expected have a total of $4.2 million (Canadian
Dollars) in new cash equity, after projected fees and expenses associated with
the Private Placement."
The principal shareholders of Tremblant after the completion of the Acquisition,
as presently negotiated, shall be Burgio Family Holdings Inc., and its
majority-owned subsidiary, ALBAR Capital Corp., each expected to own 21.69% and
36.78%, respectively, of the common shares of Tremblant ("Tremblant Common
Shares"), assuming the completion of the maximum Private Placement. Burgio
Family Holdings Inc. is currently the largest shareholder of LFG's common stock.
Burgio Family Holdings Inc. and ALBAR Capital Corp. currently own 30% and 70%,
respectively, of the outstanding Class A Preferred Shares of MCI.
LFG has also executed a sponsorship agreement (the "Sponsorship Agreement") with
Raymond James. Pursuant to the terms and conditions of the Sponsorship
Agreement, Raymond James, subject to completion of satisfactory due diligence,
has agreed to act as sponsor in connection with the Acquisition and shall
provide a sponsor report as required by Policy 2.2 of the TSX Venture.
After completion of the Acquisition as presently negotiated:
(i) the CPC's board of directors will consist of eight members, being Al Burgio,
Leo Couprie, William Fatica, Gerry Quinn, William Rancic and Joel Sebastian all
current directors of LFG, as well as William L. Hess and Alain Lambert both
current directors of Tremblant;
(ii) management will consist of Al Burgio as President and Chief Executive
Officer, William Moore as Chief Financial Officer, Tyrone Ganpaul as
Vice-President of Sugar Operations, and J. Michael Fish as Vice-President of
Flour and Baking Mix Operations; and
(iii) Robert E. Brown and Luc Filiatreault, both current members of Tremblant's
board of directors, have agreed to resign upon the completion of the
Acquisition.
William L. Hess, Q.C., has been a Managing Partner of Canadian Public Venture
Capital Group since March 2003. He has also been a consultant to the Mendelsohn
law firm in Montreal, Quebec since May 2002. He was the President of the
Canadian Venture Exchange (now TSX Venture) from its inception in November 1999
until January 2002. From 1992 to 1999, he was the Chairman of the Alberta
Securities Commission. Mr. Hess holds a Bachelor of Laws degree (LL.B.) from the
University of Ottawa and a Bachelor of Arts degree (B.A.) from Queen's
University, Kingston, Ontario. He was called to the bar in Ontario in 1979 and
in Alberta in 1981. He was appointed Queen's Counsel in 1993. Mr. Hess was the
Chairman and a Director of Canadian Public Venture Equities I Inc., a capital
pool company listed on TSX Venture that completed its Qualifying Transaction and
is now Allen-Vanguard Corporation, listed on the TSX. From March 2003 to June
2004, Mr. Hess was the Chairman and a Director of Canadian Public Venture
Capital I Inc., a capital pool company that completed its Qualifying Transaction
and changed its name to NordTech Aerospace Inc. Mr. Hess is currently a Director
of Canex Energy Inc. and Environmental Applied Research House - EARTH (Canada)
Corporation, public companies listed on TSX Venture. Mr. Hess is also currently
a Director of Allen-Vanguard (TSX: VRS) and the Chief Financial Officer,
Secretary and a Director of Canadian Public Venture Finance I Inc., a capital
pool company listed on TSX Venture. Mr. Hess is also currently a Director of
Damian Capital Corp., a public company listed on the NEX board of TSX Venture.
Alain Lambert has been a Managing Partner of Canadian Public Venture Capital
Group since March 2003. Mr. Lambert has also been the President of One and
Company Communications Inc., a private holding company, since February 2002. Mr.
Lambert was a Managing Partner of Trilogy Integrated Investor Relations Inc., an
investor relations firm, from July 1998 to May 2001. Mr. Lambert holds a
Bachelor of Laws degree (LL.B.) from the University of Montreal and a diploma of
collegial studies, specializing in administration from the College
Jean-de-Brebeuf, Montreal, Quebec. In 1986, Mr. Lambert was admitted to the
Quebec Bar Association. Mr. Lambert is currently a Director of Luke Energy Ltd.
and Allen-Vanguard, public companies listed on TSX, as well as the Vice-Chairman
of the Board of Directors of Multi-Glass International Corp. and a Director of
NordTech Aerospace Inc., public companies listed on TSX Venture. He is also
currently the President and Chief Executive Officer of Canadian Public Venture
Finance I Inc., a capital pool company listed on TSX Venture. Mr. Lambert is
also the President, Chief Executive Officer and a Director of Damian Capital
Corp., a public company listed on the NEX board of TSX Venture.
Assuming the completion of the maximum Private Placement of 11,111,100
Subscription Receipts and the exchange of said Subscription Receipts into Common
Shares of LFG, it is anticipated that:
(A) the holders of the LFG Common Shares will receive three (3) Tremblant Common
Shares with a deemed value of $0.27 (Canadian Dollars) per share for each share
owned for an aggregate of 30,948,600 Tremblant Common Shares (prior to the
Consolidation);
(B) the holders of the Class A Preferred Shares will receive 50,000,000
Tremblant Common Shares (prior to the Consolidation) with a deemed value of
$0.27 (Canadian Dollars) per share;
(C) the holders of the Exchangeable Shares will receive 4,500,000 Tremblant
Common Shares (prior to the Consolidation) with a deemed value of $0.27
(Canadian Dollars) per share; and
(D) the outstanding stock-options of LFG shall be replaced with stock options of
Tremblant, with an exercise price of no less than $0.40 (Canadian Dollars) per
share (prior to the Consolidation).
Dundee and Raymond James shall receive, in aggregate, a cash commission of 8% of
the gross proceeds of the Private Placement and options ("Broker Warrants") to
acquire such number of Common Shares equal to 10% of one-third of the number of
Subscription Receipts sold under the Private Placement, at a price of $0.81
(Canadian Dollars) per Common Share, exercisable until the 18 month anniversary
of the closing date of the Private Placement. The outstanding Broker Warrants
will be replaced with 1,111,100 agents options of Tremblant (prior to the
Consolidation) with an exercise price of $0.27 (Canadian Dollars) per share,
assuming the completion of the maximum Private Placement.
The completion of the Acquisition is subject to the approval of TSX Venture and
all other necessary regulatory approval. The completion of the Acquisition is
also subject to additional conditions precedent, including: (i) shareholder
approval of the Tremblant for the Acquisition, the Continuance, the Change of
Name, and the Consolidation; (ii) shareholder approval of LFG, if required
pursuant to applicable corporate law; (iii) satisfactory completion of due
diligence reviews by the parties; (iv) board of directors approval of the
Tremblant and LFG; (v) the entering into of a formal share exchange agreement
and lock-up agreements with sufficient holders of the issued and outstanding LFG
Common Shares and 100% of the shares of MGH and MCI not owned by LFG; (vi) the
completion of the Private Placement for minimum proceeds of $1,500,000 (Canadian
Dollars); and (vii) certain other conditions.
The complete terms and conditions of the Engagement Letter, Letter Agreement and
Sponsorship Agreement can be found on Form 8-k filed with the U.S. Securities
and Exchange Commission by Loretta Food Group Inc.
ABOUT CPVC TREMBLANT INC.
Tremblant is a capital pool company that is listed on the TSX Venture and
completed its initial public offering on August 30, 2004. Tremblant currently
has, prior to the Consolidation, 9,700,000 common shares issued and outstanding
and a total of 10,970,000 common shares on a fully diluted basis. As at February
28, 2005, Tremblant had cash assets net of liabilities of in excess of
approximately $1,700,000 (Canadian Dollars). Further information regarding
Tremblant can be obtained by visiting SEDAR http://www.sedar.com.
ABOUT DUNDEE SECURITIES CORPORATION
Dundee Securities Corporation is a wholly-owned subsidiary of Dundee Wealth
Management Inc., a Canadian owned, TSX listed wealth management company that
provides investment management, securities brokerage, financial planning and
investment advisory services to individuals, financial advisors, institutions,
corporations and foundations. Dundee Wealth oversees C$42.7 billion in assets
under management and administration and 2,618 independent financial advisors and
insurance agents located in 684 branches across Canada.
ABOUT RAYMOND JAMES LTD.
Raymond James, Ltd. is a wholly owned subsidiary of Raymond James Financial
Inc., a publicly traded company on the New York Stock Exchange. Raymond James
Financial is a Florida-based diversified holding company providing financial
services to individuals, corporations and municipalities through its subsidiary
companies. Its three wholly owned broker/dealers, Raymond James & Associates,
Raymond James Financial Services and Raymond James Ltd. have more than 5,000
financial advisors serving 1.3 million accounts in 2,100 locations throughout
the United States, Canada and overseas. In addition, total client assets are
approximately US$134 billion, of which are approximately US$25 billion are
managed by the firm's asset management subsidiaries.
About Loretta Food Group Inc.
Loretta Food Group Inc. is a diversified food holding company, with operations
in Canada and the United States. The Company manufactures and markets baking
mixes, spices, flour products, sugar products, snack foods and other food
products, under its brand names, private label and under licensing agreement
with various national corporations. Its brand names include "Loretta", "Donna",
"Amigos", "Jimmy Pop Corn", "Sweet Valley", "Rich'n Moist", "Rich'n Fluffy", and
"County Fare". Its customers include some of the largest retailers in Canada and
the United States. Subsidiaries include Loretta Foods Limited, Bayshore Foods
Inc., LF Licensed Products Inc., Loretta Baking Mix Products Ltd., Sweet Valley
Food Corporation, and LF Brands Inc., as well as the majority-ownership of
Golden Gate Flour Corporation. Loretta Food Group Inc. is a reporting issuer
with the U.S. Securities & Exchange Commission.
THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN OFFER TO BUY
OR THE SOLICITATION OF AN OFFER TO SELL SECURITIES IN ANY JURISDICTION. ANY
SOLICITATION OR OFFER TO BUY LFG'S COMMON STOCK WILL BE MADE, IF AT ALL,
PURSUANT TO AN OFFER TO PURCHASE AND RELATED MATERIALS TO BE CONSTRUCTED AND
DISTRIBUTED AT A FUTURE DATE. STOCKHOLDERS SHOULD READ ANY SUCH MATERIALS
CAREFULLY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING THE TERMS
AND CONDITIONS OF ANY OFFER. STOCKHOLDERS WILL BE ABLE TO OBTAIN THE OFFER TO
PURCHASE AND RELATED MATERIALS WITH RESPECT TO ANY TENDER OFFER, IF APPLICABLE,
FREE AT THE SEC'S WEBSITE AT WWW.SEC.GOV.
FORWARD LOOKING STATEMENTS
Statements made in this Press Release that state and reflect assumptions,
expectations, projections, intentions, and/or beliefs about past and future
events are intended as "forward looking statements". You can identify these
statements by the fact that they do not relate to historical or current facts.
They use words such as "anticipate," "estimate," "project," "forecast," "may,"
"will," "should," expect," "assume," and other derivations thereof and other
words of similar meaning. Any or all of the Loretta Food Group's forward-looking
statements may turn out to be wrong. They can be affected by inaccurate
assumptions or by known and unknown risks and uncertainties. For a description
of many of these risk and uncertainties please refer to the company's filings
with the U.S. Securities & Exchange Commission (www.sec.gov).
Contact Information:
Loretta Food Group Inc.
Phone: (905) 678-9250
Fax: (905) 678-0733
Al Burgio, Chairman & CEO
aburgio@lorettafoods.com