Vancouver’s Rainmaker Entertainment announced August 1 that 99.91% of the votes cast by shareholders July 31 approved the sale of the company to Rainmaker Studios Inc., which is a wholly owned subsidiary of China-based Xing Xing Digital Corp.
Rainmaker (TSX:RNK) announced the proposed sale in July and the transaction still requires regulatory approval.
As part of the deal, Xing Xing would assume $7 million in debt as well as all real estate property leases. One component of the deal would have Rainmaker provide a four-year, $5 million loan to RSI – a loan that would carry an interest rate of 2% above prime rate and can be pre-paid at any time, penalty free.
Rainmaker also gets the option, exercisable in the fourth year of the loan, to convert the loan principal and accrued interest into common shares of RSI.
“Following completion of the transaction, Rainmaker’s assets will include working capital in excess of $2 million, proceeds of the RSI loan, the potential to participate in any adjusted gross revenues payable to the producer of Escape from Planet Earth and substantial non-capital tax losses,” Rainmaker chair Tim McElvaine said when he announced the deal. “The board remains committed to maximizing the value of these assets for Rainmaker’s shareholders.”
Shares in Rainmaker scraped $3 in late 2007. They closed up $0.03, or 13.6%, at $0.25 on August 1.
