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B&A Fertilizers Limited - s. 1(10)(a)(ii)
Headnote
OSC Staff Notice 12-703 Applications for a Decision that an Issuer is not a Reporting Issuer -- issuer deemed to no longer be a reporting issuer under applicable securities legislation -- issuer has fewer than 15 security holders in Ontario and fewer than 51 security holders worldwide
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
April 6, 2018
IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, c. S.5, AS AMENDED (the Act) AND IN THE MATTER OF B&A FERTILIZERS LIMITED (the Filer)
ORDER (Subparagraph 1(10)(a)(ii) of the Act)
Background
The Ontario Securities Commission has received an application from the Filer for an order pursuant to subparagraph 1(10)(a)(ii) of the Act that the Filer is no longer a reporting issuer (the Exemptive Relief Sought).
Interpretation
Terms defined in National Instrument 14-101 Definitions have the same meaning if used in this order, unless otherwise defined.
Representations
This order is based on the following facts represented by the Filer:
1. The Filer is a corporation amalgamated under the BVI Business Companies Act, 2004 (the BVI Act) as evidenced by a certificate of merger dated March 13, 2013 issued by the Registrar of Corporate Affairs of the British Virgin Islands pursuant to which Rio Verde Minerals Development Corp. (Rio Verde) and B&A Fertilizers Limited were amalgamated to form the Filer (the Merger). The Filer is the corporation resulting from the Merger and is the successor in law to Rio Verde.
2. The Filer's head office is located at Rua Clodomiro Amazonas, n. 249, 120 andar, Itaim Bibi, São Paolo, Brazil.
3. The Filer is a mining company engaged in the exploration and development of fertilizer projects in Brazil.
4. The Filer is a reporting issuer only in Ontario and not in any other jurisdiction of Canada.
5. The authorized capital of the Filer consists of an unlimited number of ordinary shares. The sole shareholder of the Filer is B&A Mineracão S.A. (B&A Mineração).
6. Prior to the Merger, Rio Verde's authorized capital consisted of an unlimited number of ordinary shares without par value (the Ordinary Shares). The Ordinary Shares were listed on the Toronto Stock Exchange under the symbol "RVD".
7. Prior to the Merger, Rio Verde also had a total of 17,461,538 ordinary share purchase warrants (the Warrants) outstanding. The Warrants were issued pursuant to and governed by the terms of a warrant indenture between Rio Verde and Olympia Transfer Services Inc. made as of July 29, 2011. Each outstanding Warrant entitled the holder to purchase one Ordinary Share at a price of Cdn.$0.85 until July 28, 2016.
8. In addition, Rio Verde had a total of 1,079,000 broker warrants (the Broker Warrants) outstanding. Each Broker Warrant entitled the holder to acquire one unit of Rio Verde at a price of Cdn.$0.65 until July 28, 2016, with each unit being comprised of one Ordinary Share and one ordinary share purchase warrant having identical terms as the Warrants described above.
9. The Merger was implemented pursuant to a plan of merger under section 170 of the BVI Act. Pursuant to the Merger, each outstanding Ordinary Share, other than Ordinary Shares held by B&A Mineração, was cancelled and exchanged for one redeemable preferred share of the surviving company (a Redeemable Share). The Redeemable Shares entitled the shareholders to cash consideration of Cdn.$0.40 per Redeemable Share.
10. Following the Merger, B&A Mineração beneficially owned and exercised control and direction over 100% of the issued and outstanding Ordinary Shares. The Ordinary Shares were subsequently delisted from the Toronto Stock Exchange on March 25, 2013.
11. Following the Merger, the Warrants and Broker Warrants remained outstanding as securities of the Filer. As a result, the Filer did not meet the requirements for the simplified procedure under OSC Staff Notice 12-703 Applications for a Decision that an Issuer is not a Reporting Issuer (the OSC Staff Notice 12-703), as it was unable to certify that that its outstanding Warrants were owned by fewer than 15 securityholders in Ontario and fewer than 51 in total worldwide.
12. The Warrants and Broker Warrants expired in accordance with their respective terms on July 28, 2016. As a result, the outstanding securities of the Filer, including debt securities, are now beneficially owned directly or indirectly, by fewer than 15 security holders in Ontario and fewer than 51 security holders worldwide; specifically, the Ordinary Shares are held by a single shareholder resident in Brazil, and there are no other securities of the Filer outstanding.
13. No securities of the Filer are traded on a marketplace as defined in National Instrument 21-101 Marketplace Operations or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.
14. The Filer is currently subject to a cease trade order dated May 5, 2016 issued by the Director of the Ontario Securities Commission pursuant to paragraph 2 of subsection 127(1) and subsection 127(4.1) of the Act ordering that the trading in the securities of the Filer cease until further ordered by the Director. The Filer has applied for and expects to be granted concurrently with this order, a full revocation of the cease trade order.
15. The Filer is applying for an order that it is not a reporting issuer in Ontario.
16. The Filer is not in default of securities legislation, except for the failure to file:
(a) its audited annual financial statements and annual management's discussion and analysis (MD&A) for the year ended December 31, 2016, and the related certification of filings of the Chief Executive Officer and Chief Financial Officer (the Certification) required under Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings; and
(b) its interim financial statements and interim MD&A for the interim periods ended March 31, 2016, June 30, 2016, September 30, 2016, March 31, 2017, June 30, 2017 and September 30, 2017, and the related Certifications.
17. The Filer has no current intention to distribute any securities to the public in Canada, nor to seek public financing by way of an offering of securities in Canada.
18. The Filer is not eligible to use the simplified procedure under OSC Staff Notice 12-703 because it is in default of its obligations under the Act.
19. Upon the grant of the Exemptive Relief Sought, the Filer will not be a reporting issuer or the equivalent in any jurisdiction in Canada.
20. The Filer has paid all outstanding participation fees and filing fees owing to the Commission.
Order
The Commission is satisfied that the order meets the test set out in the Act for the Commission to make the order.
The order of the Commission under the Act is that the Exemptive Relief Sought is granted.
"Deborah Leckman"
Commissioner
Ontario Securities Commission
"Mark Sandler"
Commissioner
Ontario Securities Commission