Houston-based American International Industries to acquire interests in timber, agricultural concessions in Cameroon in return for stock in its newly-formed entity Africa AG Corp
August 29, 2011
– American International Industries, Inc. (OTCBB and OTCQB: AMIN) ("American" or the "Company") today announced that it has entered into a binding Heads of Agreement to acquire interests in timber and agricultural concessions in the West African nation of Cameroon in consideration for the issuance of stock by a newly-organized entity of American, Africa Ag Corporation ("AAC"). The parties are preparing a definitive Sales and Purchase Agreement for execution and closing, expected to occur during the 4th quarter of 2011.
Upon the closing of this acquisition, American and its shareholders will retain an equity interest of approximately 5% of AAC, and the current owners of the timber concessions will own the balance of the equity interest. There shall be no cash consideration paid by American or AAC, nor will any American shares be issued in connection with the acquisition. American will provide AAC with executive and administrative services in exchange for a cash management fee from AAC, initially fixed at $250,000 for an initial phase of AAC, and American will be reimbursed for direct expenses it incurs on behalf of AAC. After conclusion of the initial phase in 2012, additional management fees will be subject to negotiation between AAC and American.
Mr. Daniel Dror, Chief Executive Officer of American, stated that "this is the first African transaction originated by American’s President, Mr. Scott Gaille, who introduced the African concessions’ controlling interest owners to American. Mr. Gaille has travelled to 22 African nations, including trips on behalf of Occidental Petroleum Corporation, and for other ventures, developing multiple relationships and business interests in Africa over many years."
Mr. Gaille stated that "the AAC holdings consist of more than 250,000 acres of agricultural land in the Yaounde area of Cameroon and, pursuant to the Sale and Purchase Agreement, may be operated by AAC for the sale and export of multiple products and crops, including timber and biofuels, for a period of 99 years. I am pleased to announce that AAC also has executed a contract to acquire an additional concession of 300,000 acres of sustainable Cameroon Federal timber. Together with a fully-functional sawmill, which will further enhance the operations and the value of American’s interest."
Mr. Gaille further stated that "the valuations of the agricultural and timber concessions are currently underway by independent third parties. American’s ability to provide executive and management resources to AAC will enable AAC’s management team to focus on devoting its efforts on the operation of the concessions, while reducing the time and expense incurred by AAC for administrative functions."
Mr. Dror added that "this acquisition represents American’s strategic move to utilize its executive and management resources to generate income for American, through management fees, and provide American with added value through its equity participation. American, as a diversified holding company, controls and manages four operating subsidiaries, with a management team having the expertise to provide important business development and management resources to growing companies. Further, the participation in the timber and agricultural sector is consistent with the Company’s focus on hard assets as a hedge against inflation and devaluation of currencies."
American International Industries, Inc. is a diversified holding company, with a business model similar to General Electric, Tyco International, and Berkshire Hathaway. The Company has holdings in Industry, Finance and Oil & Gas, and has a significant Real Estate portfolio, all in Houston, TX and its surrounding areas. The vision of the Company is to further develop holdings in its core industries and plans to expand its interests in the energy sector through acquisition of existing companies, applying the financial resources and management expertise to foster the growth and profitability of the acquired businesses. The holding company serves as a financial and professional partner to the management of the subsidiaries. The role of the holding company is to improve each subsidiary’s access to capital, achieve economies of scale by consolidating administrative functions, and utilize the financial and management expertise of corporate personnel across all units. The Company is continuing to work with management of the subsidiary companies to improve revenues, operations and profitability.