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March 20, 2013 /PRNewswire/ -- Blue Wolf Mongolia Holdings Corp. (NASDAQ: MNGL) ("Blue Wolf" or the "Company") today announced the execution of a Memorandum of Understanding ("MOU") for a business combination with Li3 Energy, Inc. (OTCBB:LIEG), a US-listed exploration stage public company in the lithium mining and energy sector ("Li3"). Li3 aims to acquire, develop and commercialize a significant portfolio of lithium brine deposits in the Americas. With its controlling interest in its Maricunga Project in
Chile, coupled with the completion of the NI 43–101 Compliant Measured Resource Report, Li3's goals are to: (a) advance Maricunga to the Feasibility Stage; (b) support the global implementation of clean and green energy initiatives; (c) meet growing lithium market demand; and (d) become a mid-tier, low cost supplier of lithium, potassium nitrate, and other strategic minerals, serving global clients in the energy, fertilizer and specialty chemical industries.
Pursuant to the MOU, a wholly-owned subsidiary of the Company will merge with and into Li3. Li3's shareholders will receive in the transaction one ordinary share of Blue Wolf for every 250 Li3 shares they own. Blue Wolf intends to negotiate and execute a definitive agreement with Li3 in accordance with the terms of the MOU. Blue Wolf's sponsor, Blue Wolf MHC Ltd. (the "Sponsor"), will forfeit 80% of its founder shares and 80% of its warrants upon the closing of the proposed transaction.
Since Blue Wolf's existing memorandum and articles of incorporation (the "Charter") provides that Blue Wolf only has until
April 20, 2013 to complete the business combination, Blue Wolf's board of directors has determined that it would be in the best interests of its shareholders to seek shareholder approval to amend the Charter to extend the termination date for three months until
July 22, 2013 (the "Extension"). In addition, shareholders will be asked to approve an amendment to the Charter to remove the requirement that Blue Wolf acquire a target business that has a fair market value equal to at least 80% of the value of the funds held in the trust account established in connection with its initial public offering (the "Trust Account") and conforming amendments to the Investment Management Trust Agreement to permit the withdrawal from the Trust Account of an amount sufficient to purchase the ordinary shares validly tendered and not withdrawn in the concurrent tender offer and extend the date on which to liquidate the Trust Account to
July 22, 2013.
Blue Wolf also announced today the commencement of its tender offer to purchase up to 7,006,515 of its ordinary shares, no par value, at a per-share price of
$9.97 per share (the "Tender Offer") in connection with the Extension and the other shareholder proposals (collectively, the "Shareholder Proposals"). The ordinary shares are currently listed on the Nasdaq Capital Market under the symbol "MNGL." On
March 19, 2013, the last reported sale price of the ordinary shares was
$9.93 per share. The Tender Offer will expire at
11:59 p.m.New York City time on
April 16, 2013, unless extended (the "Expiration Date") but will not be extended past
April 19, 2013.
The execution of a definitive agreement is subject to a number of conditions, including (i) the satisfactory completion of due diligence of the parties, (ii) the execution of lockup and support agreements, (iii) the approval of each of the shareholder proposals by Blue Wolf's shareholders and (iv) the completion of the Tender Offer. In connection with the consummation of its proposed business combination (assuming completion of the Tender Offer and shareholder approval of the Extension), Blue Wolf intends to permit its then shareholders to redeem their ordinary shares for cash pursuant to a tender offer (the "Second Tender Offer") under the tender offer rules of the Securities and Exchange Commission ("SEC") for cash; however, the Second Tender Offer in connection with the business combination has not commenced. If shareholders do not tender ordinary shares at this time, they will retain the right to participate in Blue Wolf's proposed transaction or to redeem their ordinary shares at the time Blue Wolf conducts the Second Tender Offer following execution of the definitive agreement.