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Message: Provides Clarification on Its Investment
| May 14, 2009 |
| Glen Eagle Provides Clarification on Its Investment |
| MONTREAL, QUEBEC--(Marketwire - May 14, 2009) - Glen Eagle Resources Inc. (TSX VENTURE:GER) ("Glen Eagle Resources" or the "Company") would like to clarify the legal structure for funds being advanced to Kinbauri Espana S.L. ("Espana") and how anticipated profits will be repatriated to the respective parties. Based on inquiries, we understand that the press releases issued by both parties may have lacked clarity as to these issues. The following is an explanation to clarify the structure of the transaction with Kinbauri: The investment by Glen Eagle in Espana is structured in part as share capital and in part as loan. Similar to Glen Eagle, Kinbauri has also advanced development funds to Espana in the form of share capital and loans. With this structure, both Glen Eagle and Kinbauri can repatriate positive cash flow to Canada from Kinbauri Espana with a minimum of withholding tax, maximizing monetary benefits to Kinbauri, Glen Eagle and their shareholders. All loans are non-recourse, meaning that neither Kinbauri nor Glen Eagle can make a call on their loans or demand loan payments. The agreements restrict loan repayments to positive cash flow generated from Espana's operations; further to be authorized by the Board of Espana. Funds applied by Kinbauri and Glen Eagle toward loan repayments should not be taxed in Canada. Cash or kind will only be distributed to Glen Eagle and Kinbauri in the ratio of their participating interest, whether it be by dividend or loan repayment; i.e. 55% Kinbauri: 45% Glen Eagle or 50% Kinbauri: 50% Glen Eagle, or as the case may be. |
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