CORDY OILFIELD SERVICES INC. ANNOUNCES EXECUTION OF PURCHASE “AGREEMENT TO ACQUIRE THE BUSINESS AND ASSETS OF PLATINUM NORTH RESOURCES AND HEART RIVER HOLDINGS (2011) LTD.
CALGARY, Alberta, March 10, 2020 (GLOBE NEWSWIRE) -- Cordy Oilfield Services Inc. (“Cordy” or the “Company”) (TSX VENTURE: CKK) is pleased to announce that its
wholly owned subsidiary Cordy Environmental Inc. (“CEI”) has entered into an asset purchase agreement dated March 10th, 2020 with Platinum North
Resources Ltd. (“Platinum North”) and Heart River Holdings (2011) Ltd. (“Heart River”), collectively the “Vendors”, to purchase, for an aggregate
purchase price of $4.25 million, subject to customary adjustments, all of the business, assets, property and equipment used in the Vendors’ business operating in northern Alberta and northeastern
British Columbia (the “Acquisition”).
Purchase Price and Payment
The aggregate purchase price for the Acquisition is $4.25 million, subject to adjustments, is payable by way of cash payments at closing of $2,500,000, the issuance of 25,000,000 ($750,000) common shares of Cordy at a deemed price of $0.03 per common share and promissory notes in the principal amount of $1,000,000. The promissory notes are non-interest bearing and will be due and payable 150 days following the closing and their repayment will be secured by a general security agreement.
In conjunction with the acquisition, CEI has entered into a sale and leaseback agreement with a private lender in the net amount of $4,250,000, payable over a five-year term with an effective interest rate of 7.45%.
Platinum North and Heart River
The Vendors operate diversified transportation and logistics services businesses which primarily support liquid waste management and reclamation and remediation in the oil and gas industry in northern Alberta. The assets utilized include a fleet of winch trucks, texas beds, picker trucks, end dumps, walking floors, gravel trucks and flat deck super B's. The Acquisition complements Cordy’s existing liquid waste business and expands its reclamation and remediation capabilities. Additionally, the Acquisition provides a strategic expansion of Cordy’s geographical footprint into a corridor that, over the long term, should see an increase in demand for services from an increase in exploration and production of natural gas to support LNG Canada and Costal Gas Link. The Acquisition further exemplifies Cordy’s goal to continue to develop sustainable operations, with a focus on waste management and responsible environmental stewardship.