Business
Foraco International solidifies position in Russia by acquiring controlling interest of Eastern Drilling Company ("EDC")
Foraco International solidifies position in Russia by acquiring controlling interest of Eastern D...
About this update from Foraco International Sa
[{"type":"text","content":"\n\n\n\nJan. 20, 2010 (Canada NewsWire Group) -- TORONTO and MARSEILLE, France, Jan. 20 /CNW/ -- Foraco International SA (the \"Company\" or \"Foraco\"), a leading global provider of diversified drilling services, today announced it has entered into a binding agreement with Walvides Investment Ltd (\"Walvides\"), from Cyprus, to acquire a 50% interest of LLC Eastern Drilling Company (\"EDC\") from Russia. Once the deal is completed, Foraco and Walvides will each own 50% of EDC's shareholdings, but Foraco will have the controlling interest in EDC through a shareholders agreement to be entered into with Walvides.EDC has operated diamond drilling services for major and junior foreign and Russian companies in the mining industry in the Russian territory since 2007. Headquartered in Moscow, EDC's operational facilities are located in Far East Russia and Eastern Siberia, where many mining developments are located or managed. EDC has two subsidiaries in Kazakhstan and the Kyrgyz Republic. EDC's fleet consists of five modern diamond drill rigs and ancillary equipment, supported by skilled managers and workers. The Company expects EDC to generate approximately 10 million USD revenue in 2010 through EDC's existing customer contracts.The terms of the proposed transaction include:- cash consideration of 2 million USD upon closing,- adjustment based on EDC's 2010 financial performance, to be paid in2011, and- completion of certain conditions precedent, including the enteringinto of a shareholder agreement with Walvides.Through Walvides, EDC' founders and present managers will retain a 50% (non-controlling) interest and will continue managing and developing EDC. Foraco will bring new drilling technologies, management, technical, financial and operational support to EDC and will support EDC's development.\"This is an excellent opportunity for Foraco to now establish a permanent presence in Russia and the CIS countries following our successful launch into northwest Russia in 2009,\" said Daniel Simoncini, Chairman and Chief Executive Officer of Foraco. \"This acquisition will add a significant business region to our Company with high growth potential in the near future.\"Jean-Pierre Charmensat, co-CEO and Chief Financial Officer added, \"We are confident that the combination of EDC's proven track record, good reputation, energetic management an...