Tahera Diamond agrees to plan of arrangement transaction with Ag Growth

By Caroline Salls

Pittsburgh, April 20 - Tahera Diamond Corp. has entered into an agreement with Ag Growth Income Fund under which Tahera wholly owned subsidiary Benachee Resources Inc. will transfer substantially all of its assets and liabilities to a new Tahera subsidiary through a plan of arrangement under the Canada Business Corporations Act, according to a company news release.

Under the plan, which is expected to take effect in June, Ag Growth unitholders will receive one common share of Benachee in exchange for every trust unit of Ag Growth held on the effective date of the transaction, and Benachee will change its name to Ag Growth Industries Corp.

Upon completion of the transaction, new Ag Growth Industries will operate the existing businesses of Ag Growth and its subsidiaries, and the existing trustees and management of Ag Growth will become the board and management of new Ag Growth.

Tahera said new Ag Growth is not acquiring any additional business carried on by Benachee.

Under the plan of arrangement, a total of $13 million will be received by Tahera in the form of cash, $4 million in common shares and $4 million in convertible preferred shares of new Ag Growth.

Tahera will then pay the $13 million to senior secured creditor Caz Petroleum Inc., which has agreed to support the plan and the application for a Companies' Creditors Arrangement Act approval order.

According to the release, Caz has put in place a debtor-in-possession credit facility of up to $5 million to finance the restart of the Jericho Mine.

The plan transaction is subject to various customary commercial conditions, including the receipt of regulatory approvals, court approval and approval of at least 66 2/3% of the votes cast at the meeting of Ag Growth unitholders.

The company said it expects to obtain CCAA court approval by April 30.

Based in Toronto, Tahera is a diamond exploration company.

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