1-10-14 8:23 AM EST | Email Article

Sunshine Oilsands Ltd. Announces Additional Closing of Private Placement Financing of HK$336 Million of Common Shares and Warrants Under the General Mandate

Canada NewsWire

CALGARY, Alberta and HONG KONG, Jan. 10, 2014 /CNW/ - Sunshine Oilsands Ltd. (the "Corporation") (HKEX: 2012, TSX: SUO) is pleased to provide an update with respect to its private placement (the "Placement") referred in its announcements dated December 3, 2013 and December 10, 2013.

The Corporation is pleased to announce that it has received and accepted an irrevocable subscription agreement (the "Strong Subscription Agreement") from Strong Petrochemical Holdings Limited ("Strong Petrochemical") for 45,588,235 units of the Corporation ("Units") at a price of HK$1.70 per Unit (the "Subscription Price") (approximately CDN$0.23 per Unit at current exchange rates) for total gross proceeds of HK$77,500,000 (approximately CDN$10.8 million). The Strong Subscription Agreement will replace the subscription by Global Petroleum Services Limited ("Global Petroleum") of which subscription amount has been reduced accordingly, referred to in the Company's announcement dated 3 December 2013. The Corporation anticipates closing the remaining balance of the Global Petroleum subscription agreement in the near future.

Each Unit is comprised of one Class "A" Common Voting Share of the Corporation ("Common Share") and one-third of one purchase warrant of the Corporation ("Warrant"). Each whole Warrant entitles the holder to acquire one Common Share at an exercise price of HK$1.88 per Common Share (the "Warrant Exercise Price") (approximately CDN$0.26 per Common Share) for a period of 24 months following the closing date of this placing. The Warrant Exercise Price will be subject to normal adjustment provisions in the case of share capital or corporate reorganizations.

Both the Subscription Price and the Warrant Exercise Price were determined after arm's length negotiation between the Corporation and Strong Petrochemical.

Strong Petrochemical is an independent, third party company based in Hong Kong and listed on the Hong Kong Stock Exchange under stock code 852. In connection with the Strong Subscription Agreement, the Corporation has agreed to pay a finder's fee equal to 3% of the gross proceeds of the placing to Strong Petrochemical to Far East Enterprise Investment Foundation Limited, which finder's fee may, at the sole election of the Corporation, be paid through the issuance of Units to the finders at a deemed price of HK$1.70 per Unit (the "Finder Price") (approximately CDN$0.23 per Unit). Additionally, the Corporation has agreed to pay Goldeast Limited a finders' fee of two-fifths of a Warrant for each Unit issued to Strong Petrochemical, such that Far East Enterprise Investment Foundation Limited will receive a cash fee equal to HK$2,325,000 and Goldeast Limited will receive 18,235,294 Warrants. After payment of the 3% cash fee payable to Far East Enterprise Investment Foundation Limited in connection with the closed subscriptions, the net proceeds to the Corporation will be HK$75,175,000 (approximately CDN $10.5 million).

To the best of the Directors' knowledge, information and belief after having made all reasonable enquiries, Strong Petrochemical, Far East Enterprise Investment Foundation Limited and Goldeast Limited are independent of and not connected with the Corporation and the connected persons of the Corporation.

Each of the Subscription Price and the Finder Price represents:

(i) a premium of approximately 2.4% to the average closing price per Common Share of approximately HK$1.66 as quoted on the Hong Kong Stock Exchange for the last thirty (30) trading days up to and including January 9, 2013 (being the trading day immediately preceding the signing of the Strong Subscription Agreement);

(ii) a premium of approximately 6.9% to the average closing price per Common Share of HK$1.59 as quoted on the Hong Kong Stock Exchange for the last five (5) trading days up to and including January 9, 2013 (being the trading day immediately preceding the signing of the Strong Subscription Agreement);

(iii) a premium of approximately 8.3% to the closing price per Common Share of HK$1.57 as quoted on the Hong Kong Stock Exchange on January 9, 2013 (being the trading day immediately preceding the signing of the Strong Subscription Agreement).

The Warrant Exercise Price represents:

(i) a premium of approximately 13.3% to the average closing price per Common Share of approximately HK$1.66 as quoted on the Hong Kong Stock Exchange for the last thirty trading days up to and including January 9, 2013 (being the trading day immediately preceding the signing of the Strong Subscription Agreement);

(ii) a premium of approximately 18.2% to the average closing price per Common Share of HK$1.59 as quoted on the Hong Kong Stock Exchange for the last five trading days up to and including January 9, 2013 (being the trading day immediately preceding the signing of the Strong Subscription Agreement); and

(iii) a premium of approximately 19.7% to the closing price per Common Share of HK$1.57 as quoted on the Hong Kong Stock Exchange on January 9, 2013 (being the trading day immediately preceding the signing of the Strong Subscription Agreement).

The Common Shares to be issued pursuant to the Units issued to Strong Petrochemical represent approximately 1.49% of the existing issued Common Shares and, immediately following the completion of the closing of this subscription, approximately 1.46% of the then enlarged total issued Common Shares of the Company.

An application will be made by the Corporation to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the Common Shares to be issued pursuant to the Units issued to the Strong Petrochemical, Far East Enterprise Investment Foundation Limited and Goldeast Limited.

Closing of the placing is conditional upon: (i) the Hong Kong Stock Exchange ("HKEX") and the Toronto Stock Exchange approving the listing of the Common Shares comprising the Units, the Common Shares issuable upon exercise of the Warrants and the Common Shares issuable in connection with the payment of the finder's fees; (ii) compliance of the placing with other requirements under the HKEX Listing Rules and the Hong Kong Code on Takeovers and Mergers or otherwise of the HKEX and the Securities and Futures Commission of Hong Kong; and (iii) the receipt of all other required regulatory approvals.

Closing of the Strong Subscription Agreement is expected to occur on or about January 14, 2014.

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

Date of announcement

Event

Estimated net proceeds

Intended use of proceeds

Actual use of proceeds as at the date of this announcement

December 3, 2013 and December 10, 2013

Placing of 106,800,000 Common Shares and 35,600,000 Warrants

HK$176,113,200

To address its short term capital requirements, corporate objectives and for general corporate purposes

Approximately HK$71,000,000 used as intended

EFFECTS ON SHAREHOLDING STRUCTURE

The existing shareholding structure of the Corporation and the effect of the placing to Strong Petrochemical on the shareholding structure of the Corporation immediately following the completion of the placing is set out below.

Name of Shareholder

At the date of this Announcement

Immediately after the completion of the Placing


Number of Common Shares

Percentage (%)

Number of Common Shares

Percentage (%)

Mr. Hok Ming Tseung

266,666,640

8.69

266,666,640

8.57

Premium Investment Corporation

239,197,500

7.80

239,197,500

7.68

Sinopec Century Bright Capital Investment Limited

239,197,500

7.80

239,197,500

7.68

China Life Insurance

231,411,600

7.54

231,411,600

7.43

Charter Globe Limited

206,611,560

6.74

206,611,560

6.64

Strong Petrochemical

Nil

-

45,588,235

1.46

Other Shareholders

1,884,082,991

61.43

1,884,082,991

60.53

Total

3,067,167,791

100.00

3,112,756,026

100.00

ABOUT SUNSHINE OILSANDS LTD.

Sunshine Oilsands Ltd. is one of the largest holders of oil sands leases by area in the Athabasca oil sands region, which is located in the province of Alberta, Canada. Since Sunshine's incorporation on 22 February 2007, Sunshine has secured over one million acres of oil sands leases (equal to approximately 7% of all granted leases in this area).

Sunshine's principal operations are the evaluation, development and production of its diverse portfolio of oil sands leases. Its principal operating regions in the Athabasca area are at West Ells, Thickwood, Legend Lake, Harper, Muskwa, Goffer, Pelican and Portage. Sunshine's oil sands leases are grouped into three main asset categories: clastics, carbonates and conventional heavy oil.

FORWARD-LOOKING INFORMATION AND DISCLAIMER

This announcement may contain forward-looking information that is subject to various risks, uncertainties and other factors. All statements other than statements and information of historical fact are forward-looking statements. The use of any words "estimate", "forecast", "expect", "project", "plan", "target", "vision", "goal", "outlook", "may", "will", "should", "believe", "intend", "anticipate", "potential", and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on Sunshine's experience, current beliefs, assumptions, information and perception of historical trends available to Sunshine, and are subject to a variety of risks and uncertainties including, but not limited to those associated with resource definition and expected reserves and contingent and prospective resources estimates, unanticipated costs and expenses, regulatory approval, fluctuating oil and gas prices, expected future production, the ability to access sufficient capital to finance future development and credit risks, changes in Alberta's regulatory framework, including changes to regulatory approval process and land-use designations, royalty, tax, environmental, greenhouse gas, carbon and other laws or regulations and the impact thereof and the costs associated with compliance.

Although Sunshine believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the assumptions and factors discussed in this information release are not exhaustive and readers are not to place undue reliance on forward-looking statements as our actual results may differ materially from those expressed or implied. Sunshine disclaims any intention or obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, subsequent to the date of this announcement, except as required under applicable securities legislation. The forward-looking statements speak only as of the date of this announcement and are expressly qualified by these cautionary statements. Readers are cautioned that the foregoing lists are not exhaustive and are made as at the date hereof. For a full discussion of our material risk factors, see "Risk Factors" in our most recent Annual Information Form, "Risk Management" in our current MD&A and risk factors described in other documents we file from time to time with securities regulatory authorities, all of which are available on the Hong Kong Stock Exchange at www.hkexnews.hk, on the SEDAR website at www.sedar.com or our website at www.sunshineoilsands.com.

This document does not constitute and is not an offer to sell or a solicitation of an offer to buy common shares of Sunshine in the United States (including its territories and possessions, any State of the United States and the District of Columbia) or elsewhere.

SOURCE Sunshine Oilsands Ltd.

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Morningstar - 2014/1/10 - Sunshine Oilsands Ltd. Announces Additional Closing of Private Placement Financing of HK$336 Million of Common Shares and Warrants Under the General Mandate
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