New York, New York–(Newsfile Corp. – January 5, 2022) – Navigator Acquisition Corp. (TSXV: NAQ.P) (“Navigator” or the “Company“) is pleased to announce that it has entered into a binding share purchase agreement (the “SPA“) dated December 24, 2021, with PJSC “OR” (“OR“), an arm’s length party that is a public joint-stock company duly incorporated under the laws of Russian Federation. The transaction contemplated by the SPA (the “Transaction“) will result in the acquisition by Navigator of the wholly-owned subsidiary of OR, MCC “Arifmetika” LLC (“Arifmetika“). Pursuant to the SPA, Navigator shall buy 100% of the issued and outstanding securities of Arifmetika and in doing so form the resulting issuer.
The Transaction is intended to constitute Navigator’s Qualifying Transaction pursuant to Policy 2.4 (Capital Pool Companies) of the TSX Venture Exchange (“TSX-V“) Corporate Finance Manual. In connection with the Transaction, the Company intends to apply to list the common shares of the Resulting Issuer on Tier 1 of the TSX-V as an Industrial and Technology issuer providing financial services. The Transaction is subject to the approval of the TSX-V and other closing conditions customary for a transaction of this nature. Navigator, upon completion of the Transaction, is referred to in this news release as the “resulting issuer”.
Arifmetika is a leading microlending company that has been operating in Russia for more than 11 years. Arifmetika’s principal assets were equal to approximately C$46,726,618 based on its audited accounts for the year ended December 31, 2020. Arifmetika’s total liabilities were equal to approximately C$5,226,641 based on such audited accounts, and primarily comprised of interest-bearing loans, borrowings, accounts payable, lease liabilities and deferred tax liabilities. As of the date of the audited accounts, Arifmetika had interest revenues of C$47,948,707 and had net profit of approximately C$10,390,224. Arifmetika’s principal assets were equal to approximately C$52,810,230 based on its unaudited accounts for the nine month period ended September 30, 2021. Arifmetika’s total liabilities were equal to approximately C$5,190,039 based on such unaudited accounts, and comprised of similar liabilities as reported for the year ended 2020. As of the date of the unaudited accounts, Arifmetika had gross interest revenues generated by its lending activities of C$35,286,513 and had net profit of approximately C$6,405,080. All figures in this news release that are expressed in Canadian currency are subject to audit review and adjustment.
The SPA contemplates that OR, the sole holder of the issued and outstanding securities of Arifmetika, will exchange such securities for common shares in the capital of the resulting issuer, resulting in the issuance by the resulting issuer of approximately 224,927,143 common shares at a deemed price of C$0.36 per common share (the “Purchase Consideration Shares“). The SPA also provides for the issuance of 20,000,000 options (the “Purchase Consideration Options“). Each Purchase Consideration Option shall be exercisable at C$0.10 in the following tranches and upon the business operations meeting certain earnings before interest and taxes (EBIT) thresholds: (i) 5,000,000 Purchase Consideration Options shall be exercised in 2023 if the resulting issuer has reached an EBIT of 731,000,000 roubles (C$12,427,000,000); (ii) a further 7,000,000 Purchase Consideration Options shall be exercised in 2024 if the resulting issuer has reached an EBIT of 771,000,000 roubles (C$13,107,000,000); and (ii) the final 8,000,000 Purchase Consideration Options shall be exercised in 2026 if the resulting issuer has reached an EBIT of 1,008,000,000 roubles (C$17,136,000,000).
Upon completion of the Transaction, the resulting issuer will hold 100% of the issued and outstanding securities of Arifmetika and it is anticipated that it will be listed on the TSX-V. It is also expected that the resulting issuer will change its name and trading symbol to a name and trading symbol acceptable to Arifmetika and the applicable regulatory authorities in connection with the Transaction. The SPA was negotiated at arm’s length and there are no finder’s fees payable.
Upon completion of the Transaction, the resulting issuer is expected to have 241,864,920 common shares outstanding (undiluted).
Certain of the resulting issuer shares issued to the OR in exchange for 100% of issued and outstanding shares of Arifmetika may be subject to escrow in accordance with applicable stock exchange and securities commission rules and policies.
The Company is preparing a long form prospectus (the “Prospectus“) in connection with its application for listing on the TSX-V and is concurrently exploring the possibility of listing on the Toronto Stock Exchange (the “TSX“) which, if accepted, will result in the resulting issuer’s shares being listed on the TSX.
Management and Board of Directors
Upon completion of the Transaction, it is expected that certain current members of Navigator’s board of directors and certain senior officers will resign and the board of directors and management team of the resulting issuer will be reconstituted to be comprised of five members to be nominated by OR and two members to be nominated by Navigator. Navigator will provide further details regarding the proposed officers and directors of the resulting issuer and its intention to increase the number of directors in due course.
Conditions of Transaction
Upon completion of the Transaction, the parties anticipate that the resulting issuer will be listed on the TSX-V.
Completion of the Transaction will be subject to certain conditions, including, but not limited to, (a) receipt by Navigator of a formal valuation report of Arifmetika supporting the value of the Purchase Consideration Shares and the Purchase Consideration Options that is acceptable to the TSX-V; (b) receipt of the requisite audited and unaudited financial statements of Arifmetika; (c) receipt by the British Columbia Securities Commission of the final Prospectus; (d) approval of the Transaction by the TSX-V as Navigator’s qualifying transaction; and (e) approval of the Russian tax authorities.
Since the Transaction is an arm’s length transaction, Navigator is not required to obtain shareholder approval for the Transaction. However, shareholder approval may be required in order to implement the proposed changes to the board of directors of the resulting issuer on closing of the Transaction.
Sponsorship of a Qualifying Transaction is required by the TSX-V unless the transaction qualifies for an exemption from the sponsorship requirement. Navigator intends to apply for a waiver from the sponsorship requirements. However, there is no assurance that such waiver will be obtained and Navigator may be required to engage a sponsor. Additional information regarding sponsorship, if required, will be provided in a subsequent news release.
Additional information about Navigator, including risks and uncertainties, is contained in filings by Navigator with the Canadian securities regulators, which filings are available on its SEDAR profile.
About MCC Arifmetika LLC
Arifmetika is a leading microlending company that has been operating in Russia for more than 11 years.
It uses modern algorithms to manage risks for providing its clients with customized solutions to meet their needs. Its management team manages business processes and consists of 300 professionals, including key specialists who have many years of experience in the microfinance sector.
Arifmetika is currently developing a high-tech platform for disbursing online loans and is a leader in terms of the number of service points among federal companies in the microfinancing market. It manages more than 600 service points in 258 localities of Russia. Arifmetika has its own IT infrastructure, including three data centers (one in each of Moscow, Khabarovsk, and Novosibirsk). It uses artificial intelligence and big data solutions to analyze the customer base and develop new products and blockchain to protect personal data.
ON BEHALF OF THE BOARD
NAVIGATOR ACQUISITION CORP.
President, Chief Executive Officer and Director
For further information contact:
President, Chief Executive Officer and Director of Navigator Acquisition Corp.
Statements in this press release regarding Navigator which are not historical facts are “forward-looking statements” that involve risks and uncertainties, such as the completion of the proposed Qualifying Transaction. Such information can generally be identified by the use of forwarding-looking wording such as “may”, “expect”, “estimate”, “anticipate”, “intend”, “believe” and “continue” or the negative thereof or similar variations. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties such as the risk that the closing may not occur for any reason. Forwarding-looking statements in this news release include, but are not limited to, statements regarding the terms and conditions of the Transaction, the business and operations of the resulting issuer after completion of the Transaction and the shares of the resulting issuer being listed on the TSX-V or the TSX.
Actual results in each case could differ materially from those currently anticipated in such statements due to factors such as: (i) the decision to not close the Transaction in accordance with the terms of the SPA or the inability to close the Transaction for any reason, including TSX-V refusal to approve it; (ii) adverse market conditions; and (iii) the Company’s capital requirements. Except as required by law, the Company does not intend to update any changes to such statements.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSX-V acceptance and if applicable pursuant to TSX-V requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSX-V has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.
Neither TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V accepts responsibility for the adequacy or accuracy of this release.
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