TORONTO (CANOE) -- Bresea Resources Ltd., a large shareholder of infamous Bre-X Minerals Ltd., is now the object of takeover bid.
MFC Bancorp Ltd. said Friday afternoon that it will offer 15 cents each for Bresea's 65,518,370 outstanding common shares, in a deal worth US$9.8 million.
A mineral exploration company based in Calgary, Bresea owns 22 per cent of Bre-X, a company that became in involved in one of the biggest stock scandals in Canadian history.
In the 1990s, Bre-X announced to the world that it was sitting on a huge gold deposit in Busang, Indonesia. Company reports of the quantities of gold in the deposit helped send the company's stock in the stratosphere.
But the story came to a crashing end when it was revealed that gold samples had been faked. The stock crashed, leaving a string of claims of fraud and investor lawsuits against Bre-X, Bresea and their insiders. The claims against Bresea total over US$3 billion. The claims against Bresea total over US$3 billion.
Both companies sought protection from creditors in May, 1997. PricewaterhouseCoopers Inc. was appointed as receiver of Bresea in November, 1997.
MFC said Bresea has no directors or officers and has no active business other than managing its existing assets. According to the PricewaterhouseCoopers, as of Sept. 30, 2000, Bresea has total assets of US$31.7 million and its outstanding common shares.
PricewaterhouseCoopers has recently announced a proposed settlement of the claims, but any deal is still subject to the approval of the courts and shareholders.
MFC said that if it gets control of Bresea it intends to propose a board of directors for the company who will work with the PricewaterhouseCoopers to settle the claims against Bresea and complete the company's restructuring.
If all the claims against Bresea are settled, the new board would move the company into merchant banking opportunities in North America.
The shares of Bresea were delisted from the Montreal Stock Exchange back in 1997.
Based in Switzerland, MFC Bancorp owns financial services companies that specialize in international merchant banking.
