MCW Energy Group Limited
MCW FUELS INC. (An MCW Energy Group LIMITED Subsidiary) ENTERS INTO BINDING AGREEMENT TO ACQUIRE WESTCO PETROLEUM DISTRIBUTORS.
MCW Energy Group Limited / Key word(s): Contract
June 12th, 2012. MCW FUELS INC. (An MCW Energy Group LIMITED Subsidiary) ENTERS INTO BINDING AGREEMENT TO ACQUIRE WESTCO PETROLEUM DISTRIBUTORS. June 12th, 2012: Shediac, New Brunswick, Canada/Frankfurt, Germany: MCW Energy Group Limited, a Canadian holding company with two business units focused on value creation; i) MCW Fuels Inc., a well established distributor of gasoline and diesel fuels to service stations in southern California, and ii) MCW Oil Sands Recovery, LLC which owns an oil sands extraction process that MCW is preparing to implement in the third quarter of 2012, is pleased to announce that it has engaged Stonecap Securities Inc. as lead agent to complete a private placement financing of approximately $5,000,000 (the 'Private Placement'). The proceeds of the Private Placement will be used to fund the final payment of MCW's first 250 bbl/d oil sands extraction unit (the 'Commercial Facility') to be located in the Uinta basin of Utah, and for general working capital purposes. Construction of the Commercial Facility has been completed and, subject to the timing of the closing of the Private Placement, management of MCW anticipates installation to begin early in the third quarter of 2012, followed by first production approximately one month later. The Agreement to acquire Western Petroleum (Westco) will be implemented in two phases: The first phase details the assignment by Westco to MCW Fuels, 7 (seven) existing 76 Branded Reseller Distribution Agreements for a term of ten years. The second phase of the Agreement is the assignment by Westco to MCW Fuels, an additional 9 (nine) Branded Reseller Distribution Agreements for the same ten-year term. MCW Fuels would become the sole fuel supplier to a total of 16 Westco-supplied service stations located throughout Southern California. The terms of this Agreement include a total payment to Westco by MCW of $ 2,000,000 USD, of which the first instalment of $ 1,000,000 USD would be due on or before June 15th, 2012, which will secure the first 7 (seven) stations. The second instalment of $ 1,000,000 USD would be due on or before January 31st, 2013. MCW has secured $1,000,000 from existing lender. 'The acquisition of Westco's 76 Branded Reseller Distribution Agreements is a very important benchmark in MCW Fuel's growth as we further solidify our position as one of the top three fuel suppliers here in Southern California,' stated David Sutton, CEO of MCW Fuels. The Company expects that the Westco distribution acquisition will add approximately 25,000,000 gallons of fuel to its current annual sales volume of 1000,000,000 gallons distributed throughout the state. $250,000 phase hold back will be held unless minimum of 1,065,600 a month is not met in distribution.
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