Chinese-led investment in Empire Industries

Capital Raising
Transaction Details

Fort Capital Partners is pleased to announce the closing of a $4.5 million strategic investment in Empire Industries Ltd., by Canada Zhoufa Agricultural Holdings Ltd. (“ZAH”), a subsidiary of Zhejiang ZF Investment Co. Ltd. (“ZZG”) of China. ZAH has purchased securities representing a 28% interest in Empire on a diluted basis.

ZAH has purchased $2.5M of units consisting of one common share and one-half of one warrant. Each whole warrant will entitle the holder to purchase one additional common share at a price of $0.05 per share within one year from closing, and thereafter at an exercise price of $0.10 per share on or before the five years anniversary of the offering. The $2.0M convertible debenture purchase by ZAH bears interest at 7%, has a term of 4 years and is convertible at $0.10 per share any time until maturity.

Concurrently, Empire and ZZG announced intention to enter into a JV to incorporate a new company in China that would be owned 51% by Empire and 49% by ZZG. The joint venture’s business will include the exclusive licensing of Empire’s intellectual property in China, including the design and manufacturing of Empire’s products, and oversight and licensing of manufacturing operations to produce and supply its proprietary entertainment attractions and the licensing of its industrial products to selected manufacturers in the Zhoushan Archipelago New Area, just south of Shanghai. Note: discussions regarding the JV agreement were eventually terminated.

Canadian Resources Capital, a predecessor to Fort Capital, represented ZAH in negotiation and closing of the private placement of securities, and will represent ZAH on the Empire board of directors.

Empire Industries Ltd. operates in two market segments: Specialized Engineered Product Manufacturing and Steel Fabrication. The company is focused on exploiting its intellectual property in the entertainment business through the design and supply of world class amusement rides. Empire also actively fabricates steel for the infrastructure, commercial and industrial construction marketplace of Western Canada and China. Empire’s common shares are listed on the TSX Venture Exchange under the symbol EIL.

Zhejiang ZF Investment Co., a personal holding company of Mr. Junliang Xie, has private equity investments in over 10 independently operated industrial and service companies, predominately in China. Mr. Xie is a director of three private equity funds in China and the Managing Director of the Zhoushan Restructuring Private Equity Fund, a RMB ¥5 billion private equity fund whose purpose is to invest for financial returns and improve Zhoushan industries’ global competitiveness.

Fort Capital Inc. is an investment bank that works with public and private companies in Canada. The firm draws from collective capital markets experience to provide its clients with proven, accessible and independent investment banking advice and transaction execution. For more information, visit fortcapital.ca.

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