Global Cobalt Shareholders To Vote on Spin-Out of Global Energy Metals

Global Cobalt Corporation (TSXV:GCO) announced that it has filed a management information circular where shareholders will consider and vote on a Plan of Arrangement to spin-out Global Energy Metals Corporation from Global Cobalt.
The Board has considered the benefits to Global Cobalt and Shareholders, as well as the financial position, opportunities and outlook for the future potential and operating performance of Global Cobalt and Global Energy and are recommending that Shareholders vote for the approval of the Arrangement Resolution at the Meeting. Each director and executive officer of Global Cobalt has advised they intend to vote their Global Cobalt Common Shares for the Arrangement Resolution.
As quoted in the press release:

As of the anticipated effective date of September 2, 2015 (the “Effective Date”), Global Cobalt will transfer to Global Energy all of Global Cobalt’s interests in the Spin-Off Properties. As consideration for the Spin-Off Properties, Global Energy expects to issue to Global Cobalt 78,252,177 Global Energy Shares, which Global Cobalt will then distribute to Shareholders, other than Dissenting Shareholders and IMHL and its affiliates and associates, on the basis of one Global Energy Share for each Global Cobalt Common Share held immediately prior to the Effective Date. In addition to the transfer of the Spin-Off Properties, on the Effective Date Global Cobalt will transfer to Global Energy the Global Energy Assumed Debt (for which Global Energy will assume liability).
Upon completion of the Arrangement, Shareholders (other than Dissenting Shareholders and IMHL and its associates and affiliates) will own one Global Cobalt New Common Share and will receive one Global Energy share for each Global Cobalt Common Share held. Each Shareholder as at the Effective Date will, immediately after the Arrangement, continue to hold the same pro rata interest in Global Cobalt that such Shareholder held in Global Cobalt prior to the completion of the Arrangement, subject to the issuance of any Debt Conversion Shares in connection with the conversion into Global Cobalt Common Shares of all outstanding principal and interest owing by Global Cobalt to IMHL pursuant to the IMHL Loan Agreement (the “Debt Conversion”). Any shares issued will be in accordance with the TSX-V, provided that such price shall be equal to or greater than $0.05 per share.
In the course of its evaluation of the Arrangement, the Board consulted with Global Cobalt’s senior management and legal counsel and financial advisors, reviewed a significant amount of information, and considered a number of factors. The Board is of the view that the Arrangement will benefit Global Cobalt and the Shareholders. This conclusion is based on the following primary determinations:

• The Board and Global Cobalt’s management do not believe that the current market price of the Global Cobalt Common Shares reflects the full value of Global Cobalt’s assets. In particular, the Board believes the market price of the Global Cobalt Common Shares is attributed mainly to the value of the Karakul Property. Accordingly, transferring the Werner Lake Property and the Iron Creek Property to a separate entity is expected to allow Shareholders to realize the value thereof (through their holdings of Global Energy Shares).
• The Arrangement is expected to enhance the ability of each of Global Cobalt and Global Energy to pursue their corporate objectives and strategies by allowing Global Cobalt to focus on the Karakul Property and by allowing Global Energy to focus on the Werner Lake Property and the Iron Creek Property.
• The creation of two separate companies dedicated to the pursuit of their respective businesses will provide Shareholders with additional investment flexibility as Global Cobalt Shareholders will hold a direct interest in two companies, which will each focus on different business objectives.
• Each company will have independent access to capital (equity and debt), which management believes will result in more focused capital allocation practices and minimize future dilutions in each company.
• Global Cobalt Shareholders will maintain their ownership interests in Global Cobalt, subject to dilution resulting from the issuance of the Debt Conversion Shares, and through their ownership of both Global Cobalt Common Shares and Global Energy Shares, will maintain their ownership interests in Global Cobalt’s current assets following the Arrangement

The strategic reorganization is subject to the approval of shareholders of Global Cobalt, approval of the Supreme Court of British Columbia and other customary conditions and regulatory approval, including but not limited to the approval of the TSX Venture Exchange.

Click here for the Global Cobalt Corporation (TSXV:GCO) press release.
Click here for the Global Cobalt Corporation (TSXV:GCO) profile.