FOR IMMEDIATE RELEASE
August 26, 2013- Calgary, Alberta - Canoel International Energy Ltd. ("Canoel" or the "Company") (TSX VENTURE: CIL) wishes to announce that it is proposing a share consolidation of all of its issued and outstanding common shares on the basis of a ratio of one post-consolidation common share for every ten pre-consolidation common shares (the "Consolidation"), such that on a completion of the Consolidation, all of the Company's 81,884,290 issued and outstanding common shares will be consolidated into no less than 8,188,429 issued and outstanding common shares.
The Company's board of directors and management believe the Consolidation is necessary for the following reasons:
1.Merger or acquisition proposals based on share consideration are hampered by the need to issue very large amounts of stock to effect any transaction.
2.TSXV rules are designed to encourage public companies to maintain price per share trading ranges above $0.05 per share through minimum share and warrant equity issue rules. At this time the high number of shares outstanding makes it difficult to sustain higher share prices. This low share price range results in material limitations on the Company's ability to finance future projects through equity or convertible debt issues.
3.Many institutional and sophisticated investors prefer not to invest in public companies with a high number of outstanding shares and low trading price ranges. A smaller share float tends to discourage low volume traders from using limited capital to set trading ranges and bid / ask price spreads that are not reflective of the underlying value of assets to the Company.
4.Over longer periods, share consolidations do not have a material impact on the Company's total market capitalization and shareholder equity value. Market capitalization is reflective of the underlying assets of the Company.
Under the Company's articles, approval for a share consolidation must be effected by a special resolution of the shareholders. The Company will seek shareholder approval for a special resolution approving the Consolidation at its Annual and Special Meeting of shareholders of the Company to be held on August 27, 2013 (the "Meeting"). The consolidation ratio for the Consolidation is not to exceed one post-consolidation common share for every ten pre-consolidation common shares, or such lesser whole number of pre-consolidated common shares that the directors of the Company in their discretion may determine, with the Consolidation to be implemented by the Company's board of directors at any time.
The Consolidation remains subject to all required regulatory approvals, including both TSX Venture Exchange acceptance and shareholder approval. The number of outstanding stock options and warrants of the Company will similarly be adjusted by the consolidation ratio, and the exercise prices adjusted accordingly.
The Company does not propose a name change in conjunction with the Consolidation.
Further particulars and information regarding the Consolidation is available in the Company's Information Circular provided to shareholders in connection with the Meeting and made available under the Company's SEDAR profile at www.sedar.com.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information, please contact:
Jose Ramon Lopez Portillo Andrea Cattaneo
Chairman of the Board CEO & President
Telephone: (403) 938-8154
Telefax: (403) 775-4474
This press release is not to be distributed to U.S. newswire services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities law.
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