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Petroteq’s Board of Directors Unanimously Recommends Acceptance of Viston Offer

SHERMAN OAKS, CA / ACCESSWIRE / January 4, 2022 / Petroteq Energy Inc. ("Petroteq" or the "Company") (TSXV:PQE);(OTC PINK:PQEFF);(FSE:PQCF), an oil company focused on the development and implementation of its proprietary oil-extraction and …

SHERMAN OAKS, CA / ACCESSWIRE / January 4, 2022 / Petroteq Energy Inc. ("Petroteq" or the "Company") (TSXV:PQE);(OTC PINK:PQEFF);(FSE:PQCF), an oil company focused on the development and implementation of its proprietary oil-extraction and remediation technologies, announces that it has today issued a Supplement (the "Supplement") to the Directors' Circular dated November 6, 2021 (the "Directors' Circular") in respect of the offer (the "Viston Offer") by 2869889 Ontario Inc., an indirect, wholly-owned subsidiary of Viston United Swiss AG (together, "Viston"), to acquire all of the issued and outstanding common shares of the Company ("Common Shares"). As set out in the Supplement, the Board of Directors of Petroteq (the "Board") is recommending acceptance of the Viston Offer.The recommendation follows consultation with Haywood Securities Inc. ("Haywood"), as financial advisor to Petroteq and the Board.

As stated in the Directors' Circular, the Board concluded that it would defer making a recommendation to Petroteq's shareholders ("Shareholders") with respect to the Viston Offer until such time as it had fully considered all of the strategic alternatives available and received input on valuation from Haywood. Accordingly, the Directors' Circular provided no recommendation from the Board as to whether to accept or reject the Viston Offer.

Reasons for Making a Recommendation to Accept the Viston Offer

After thorough consideration of all aspects of the Viston Offer, the advice provided by Haywood and consulting with its other advisors, the Board has unanimously determined to recommend that Shareholders accept the Viston Offer and tender their Common Shares, for reasons that include the following:

  • Results of Strategic Review: Based on the results of the strategic review presented by Haywood, the Board believes that the ‎immediate cash value offered to Shareholders under the Viston Offer is more favourable to Shareholders ‎than the potential value that might otherwise result from other alternatives reasonably available to ‎Petroteq, including remaining as a stand-alone entity and pursuing Petroteq's existing strategy, in each case ‎taking into consideration the potential rewards, risks, timelines and uncertainties associated with those ‎other alternatives.
  • Premium Over Market Price: The consideration of ‎C$0.74 ‎in cash per Common Share (the "Cash Consideration") under the Viston Offer represents a premium of ‎approximately 279% over the closing price of the Common Shares on the TSX Venture Exchange (the "TSXV") on August 6, 2021, being the last trading day that the Common Shares were traded on the T‎SXV.
  • Unlikelihood of Superior Proposal: The Board, with ‎the assistance of Haywood, has taken active steps to assess and solicit strategic ‎alternatives and has attempted to secure a proposal that would be superior to the Viston Offer. However, no superior ‎alternative to the Viston Offer has emerged and Petroteq does not expect a superior alternative to emerge ‎in the near term.
  • Common Shares Remain Relatively Iliquid: Trading in the Common Shares on the TSXV remains suspended, and there is no certainty as to when ‎‎the TSXV will resume trading in the Common Shares.
  • Certainty of Outcome: The Viston Offer provides 100% cash consideration for the Common Shares and offers Shareholders certainty ‎‎of value and immediate liquidity‎.‎
  • Possible Decline in Market Price: If the Viston Offer is not successful and another alternative offer with superior financial terms does not emerge, the market price of the Common Shares in the public markets may decline significantly.
  • Reduces Inherent Business Risk: Based on the strategic review conducted with Haywood, the Viston Offer appears to provide Shareholders ‎with the value inherent in Petroteq's portfolio of projects, assuming they are fully realized, without the ‎long-term risks associated with the development and execution of those projects. Given the relatively early ‎stage of Petroteq's projects, it will be several years before the projects in Petroteq's portfolio reach ‎commercial production, if at all‎.
  • Significant Growth Funding Required: Petroteq's projects have significant funding requirements to prove and scale its technology. Petroteq currently has limited cash to fund its necessary capital projects and near-term debt maturities, which will be a further drain on cash. Equity financing sufficient to repay debt and fund the progress of Petroteq's business plan, if available, may be significantly dilutive to Shareholders.
  • Ability to Respond to Superior Proposals: Petroteq has not entered into a support or similar agreement with Viston in respect to the Viston Offer. The Board has reserved the ability to seek out or respond to proposals that may deliver greater value to Shareholders than the Viston Offer. There is nothing to prevent a third party from proposing or making a superior proposal or preclude Petroteq from changing its recommendation.

The above factors and other benefits of the Viston Offer to Shareholders are described in more detail in the Supplement. In making its recommendation that Shareholders accept the Viston Offer, the Board carefully considered a ‎number of factors and identified the factors described above as being the principal reasons for its recommendation. ‎It should be noted that the foregoing summary of the information and factors considered by the Board is ‎not intended to be exhaustive of the factors considered by the Board in reaching its conclusion and ‎making its recommendation, but includes the material information, factors and analysis considered by the Petroteq ‎Board in reaching its conclusion and recommendation.

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Petroteq’s Board of Directors Unanimously Recommends Acceptance of Viston Offer SHERMAN OAKS, CA / ACCESSWIRE / January 4, 2022 / Petroteq Energy Inc. ("Petroteq" or the "Company") (TSXV:PQE);(OTC PINK:PQEFF);(FSE:PQCF), an oil company focused on the development and implementation of its proprietary oil-extraction and …

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