Particular Committee and Board Approval
The Particular Committee was established by the Turquoise Hill Board of Administrators (the “Board”) to contemplate the Preliminary Proposal, in addition to different alternate options accessible to the Firm and, if it deemed advisable, negotiate with Rio Tinto. Following a complete analysis of the Preliminary Proposal and in depth negotiations between the Particular Committee and Rio Tinto on worth and different phrases of the Transaction, together with amendments to the financing heads of settlement between the Firm and Rio Tinto dated Could 18, 2022 (the “HoA”) to deal with the Firm’s near-term liquidity whereas the Transaction is pending, the Particular Committee unanimously really helpful that the Board approve the Transaction. The Board (excluding conflicted administrators), having acquired the unanimous advice of the Particular Committee, unanimously decided that the Transaction is in one of the best pursuits of Turquoise Hill and honest to the shareholders of Turquoise Hill aside from Rio Tinto and its associates (the “Minority Shareholders”) and recommends that Minority Shareholders vote in favour of the Transaction on the particular assembly of shareholders to be held to approve the Transaction.
Formal Valuation and Equity Opinions
In reference to its evaluation of the Transaction, the Particular Committee retained TD Securities Inc. (“TD”) to arrange a proper valuation in accordance with Multilateral Instrument 61-101 – Safety of Minority Safety Holders in Particular Transactions . TD delivered an oral opinion to the Particular Committee that, as of August 31, 2022, and primarily based on TD’s evaluation and topic to the assumptions, limitations and {qualifications} to be set forth in TD’s written valuation, the honest market worth of the widespread shares of the Firm is within the vary of C$42.00 to C$58.00 per widespread share. TD additionally delivered an oral opinion to the Particular Committee that, as of August 31, 2022, and topic to the assumptions, limitations and {qualifications} to be set forth in TD’s written equity opinion, the consideration to be acquired by the Minority Shareholders is honest, from a monetary viewpoint, to such Minority Shareholders.
The Particular Committee retained BMO Capital Markets (“BMO”) as its monetary advisor in reference to its evaluation of the Transaction. BMO delivered an oral opinion to the Particular Committee that, as of September 5, 2022 and topic to the assumptions, limitations and {qualifications} to be set forth in BMO’s written equity opinion, the consideration to be acquired by the Minority Shareholders pursuant to the Transaction is honest, from a monetary viewpoint, to such Minority Shareholders.
Transaction Particulars
The Transaction is to be effected by means of a court-approved plan of association underneath the Enterprise Firms Act (Yukon). The consummation of the Transaction is topic to plenty of circumstances customary to transactions of this nature, together with, amongst others: (i) the approval of 66.67% of votes solid by the Firm’s shareholders (together with Rio Tinto) at a particular assembly of shareholders; (ii) the approval of a easy majority of the votes solid by Minority Shareholders at such assembly; and (iii) court docket approval. Completion of the Transaction is just not topic to any financing situation.
The Firm expects to carry the particular assembly of shareholders to contemplate and to vote on the Transaction as early as potential within the fourth quarter of 2022. If accredited on the assembly, the Transaction is predicted to shut within the fourth quarter of 2022, topic to court docket approvals and different customary closing circumstances.
Additional particulars concerning the phrases and circumstances of the Transaction are set out within the Association Settlement, which shall be publicly filed by the Firm underneath its profiles at www.sedar.com and www.sec.gov . Further info concerning the phrases of the Association Settlement, the background of the Transaction and the impartial valuation and equity opinions shall be offered within the info round for the particular assembly of shareholders, which may even be filed at www.sedar.com and www.sec.gov .
Amended HoA
Concurrently with coming into into the Association Settlement and as contemplated by the time period sheet entered into on September 1, 2022, Rio Tinto and the Firm entered into an additional amended HoA to be able to handle the Firm’s near-term liquidity wants whereas the Transaction is pending. The first amendments to the HoA embody:
- Rising the early advance facility agreed in Could 2022 to US$650 million from US$400 million, offered that if there’s an anticipated funding shortfall for March 2023, the events will in good religion focus on growing the early advance facility by as much as a further US$100 million;
- Extending the date by which the preliminary fairness providing required underneath the HoA (the “Preliminary Fairness Providing”) should be carried out and early advance facility repaid from December 31, 2022 to March 31, 2023 and probably to Could 31, 2023 in sure occasions, together with regulatory or different delays to the Transaction;
- A brand new US$362 million dedication from Rio Tinto to supply extra bridge financing to Turquoise Hill within the occasion extra funds are required by the Firm in respect of the December 2022 principal compensation underneath the Oyu Tolgoi undertaking finance facility; and
- Securing Rio Tinto’s dedication to take part professional rata within the Preliminary Fairness Providing topic to sure pre-conditions set forth within the HoA.
Voting and Help Agreements
All impartial administrators and senior officers of the Firm have entered into voting and assist agreements to vote their Minority Shares in favour of the Transaction, topic to sure customary exceptions.
Advisors
BMO Capital Markets is performing as unique advisor to the Particular Committee of Turquoise Hill and Blake, Cassels & Graydon LLP is performing as authorized counsel to the Particular Committee. TD has been retained by the Particular Committee as impartial valuator.
Norton Rose Fulbright Canada LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are performing as Canadian and U.S. authorized counsel, respectively, to Turquoise Hill.
Credit score Suisse, RBC Capital Markets and Rothschild & Co are performing as monetary advisors to Rio Tinto, and McCarthy Tétrault LLP and Sullivan & Cromwell LLP are performing as authorized counsel.
About Turquoise Hill Sources
Turquoise Hill is a global mining firm centered on the operation and continued growth of the Oyu Tolgoi copper-gold mine in Mongolia, which is the Firm’s principal and solely materials mineral useful resource property. Turquoise Hill’s possession of the Oyu Tolgoi mine is held via a 66% curiosity in Oyu Tolgoi LLC; Erdenes Oyu Tolgoi LLC, a Mongolian state-owned entity, holds the remaining 34% curiosity.
Ahead-looking statements and forward-looking info
Sure statements made herein, together with statements regarding issues that aren’t historic info and statements of the Firm’s beliefs, intentions and expectations about developments, outcomes and occasions which can or might happen sooner or later, represent “forward-looking info” throughout the that means of relevant Canadian securities laws and “forward-looking statements” throughout the that means of the “secure harbor” provisions of america Non-public Securities Litigation Reform Act of 1995. Ahead-looking statements and knowledge relate to future occasions or future efficiency, replicate present expectations or beliefs concerning future occasions and are sometimes recognized by phrases reminiscent of “anticipate”, “consider”, “might”, “estimate”, “count on”, “intend”, “seemingly”, “might”, “plan”, “search”, “ought to”, “will” and comparable expressions suggesting future outcomes or statements concerning an outlook. These embody, however are usually not restricted to, statements with respect to the Transaction, together with the anticipated timing of closing and varied steps to be accomplished in reference to the Transaction, and different statements that aren’t historic info.
Ahead-looking statements and knowledge are made primarily based upon sure assumptions and different necessary elements that, if unfaithful, might trigger the precise outcomes, efficiency or achievements of the Firm to be materially completely different from future outcomes, efficiency or achievements expressed or implied by such statements or info. There could be no assurance that such statements or info will show to be correct. Such statements and knowledge are primarily based on quite a few assumptions, together with assumptions concerning the power to finish the Transaction on the contemplated phrases, that the circumstances precedent to closing of the Transaction could be happy, and assumptions concerning current and future enterprise methods, native and world financial circumstances, and the atmosphere through which the Firm operates.
Though the Firm believes that the forward-looking statements on this information launch are primarily based on info and assumptions which can be present, cheap and full, these statements are by their nature topic to plenty of elements that would trigger precise outcomes to vary materially from administration’s expectations and plans as set forth in such forward-looking statements, together with, with out limitation, the next elements, a lot of that are past the Firm’s management and the results of which could be troublesome to foretell: (a) the likelihood that the Transaction won’t be accomplished on the phrases and circumstances, or on the timing, at present contemplated, and that it might not be accomplished in any respect on account of a failure to acquire or fulfill, in a well timed method or in any other case, required shareholder and regulatory approvals and different circumstances of closing crucial to finish the Transaction or for different causes; (b) the potential of hostile reactions or adjustments in enterprise relationships ensuing from the announcement or completion of the Transaction; (c) dangers regarding the retention of key personnel through the interim interval; (d) the potential of litigation regarding the Transaction; (e) dangers associated to the diversion of administration’s consideration from the Firm’s ongoing enterprise operations; and (f) different dangers inherent to the Firm’s enterprise and/or elements past its management which might have a cloth hostile impact on the Firm or the power to consummate the Transaction.
Readers are cautioned to not place undue reliance on forward-looking info or statements. By their nature, forward-looking statements contain quite a few assumptions, inherent dangers and uncertainties, each common and particular, which contribute to the likelihood that the expected outcomes won’t happen. Occasions or circumstances might trigger the Firm’s precise outcomes to vary materially from these estimated or projected and expressed in, or implied by, these forward-looking statements. Essential elements that would trigger precise outcomes to vary from these forward-looking statements are included within the “Threat Components” part of the Firm’s Annual Info Type, as supplemented by the “Dangers and Uncertainties” part of the Firm’s Administration Dialogue and Evaluation for the three and 6 months ended June 30, 2022 (“Q2 2022 MD&A”).
Readers are additional cautioned that the lists of things enumerated within the Threat Components part of the Firm’s Annual Info Type and the “Dangers and Uncertainties” part of the Q2 2022 MD&A which will have an effect on future outcomes are usually not exhaustive. Buyers and others ought to rigorously think about the foregoing elements and different uncertainties and potential occasions and shouldn’t depend on the Firm’s forward-looking statements and knowledge to make choices with respect to the Firm. Moreover, the forward-looking statements and knowledge contained herein are made as of the date of this doc and the Firm doesn’t undertake any obligation to replace or to revise any of the included forward-looking statements or info, whether or not on account of new info, future occasions or in any other case, besides as required by relevant regulation. The forward-looking statements and knowledge contained herein are expressly certified by this cautionary assertion.
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Vice President Buyers Relations and Communications
Roy McDowall
roy.mcdowall@turquoisehill.com
Observe us on Twitter @TurquoiseHillRe
