November 27 2007 — TORONTO — AADCO Automotive Inc. has agreed to sell its automobile dismantling business to Quorum Secured Equity Trust and Quorum Investment Pool Limited Partnership.
Charles Hodgkinson President and CEO of AADCO has resigned from his position and Vince Bulbrook will assume management on behalf of the new owners. Hodgkinson will provide consulting services to AVDSI up to the completion date of the Acquisition.
According to the recent sale agreement the buyers will pay $100000 Canadian and assume all long and short term debt associated with the business. The deal is subject to the satisfaction of standard conditions including shareholder approval before December 31 2007. The company said it will seek shareholder approval at its annual meeting on December 28 2007 in Vancouver.
As part of the deal the buyers will sell $2.95 million of outstanding convertible debentures to certain purchasers at arm’s length to the company.
“Assuming the completion of the acquisition the company may not have an operating business and its common shares may then trade on the Exchange’s NEX board until such time as it graduates to the Exchange’s Tier 2 on the completion of a change of business reverse takeover or acquisition of qualifying assets” the firm said.
“The company is in the process of securing a working capital loan that will provide it with the funds needed to seek new assets or a business.”
Hodginson said in a release that “company principals feel this transition is in the best interests of both the company shareholders who will exit a business totally unprofitable to date and AVDSI employees who will transit to a new operating regime.
“It is expected that the accruing tax losses of both the parent and subsidiary estimated to be in excess of $17 million will remain intact through this transition.”