WINGARA AG LTD — M&A Activity 2015

May 14, 2015

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Proposed Acquisition

Biron Apparel Limited (“Biron”) is pleased to announce it has signed a Heads of Agreement with Elect Performance Group Pty Ltd (“Elect”) trading as JC Tanloden (“JCT”) for the acquisition of 100% of the issued capital of Elect.

The transaction will transform Biron into an agribusiness company, through the acquisition of an established business that has a good long standing reputation in the agribusiness sector. Elect is well positioned to advantage of the commercial opportunities that exist in this sector and has the potential to succeed within this industry, starting from its base that is operating at the forefront of processing, trading and exporting of hay for animal feed.

The consideration for the purchase of 100% of the share capital of Elect is $4,000,000 to be satisfied by the issue of 20,000,000 ordinary shares in Biron on a post consolidation basis.

Completion of the acquisition is conditional on the satisfaction or waiver of the following conditions:

1. Biron completing due diligence investigations on Elect and being satisfied with the outcome of those investigations.

2. Biron and the Elect shareholders entering into transaction documents to adequately document the Elect acquisition on terms satisfactory to the parties.

3. Each party obtaining shareholder approval necessary to facilitate the transaction.

4. Biron obtaining an opinion from an Independent Expert that the Elect acquisition is fair and reasonable and in the best interests of its shareholders.

5. Biron complying with the requirements of Chapter 1 and 2 of the ASX Listing Rules and obtaining written conditional approval from the ASX for the re quotation of its shares on terms satisfactory to Biron.

6. Biron obtaining all regulatory approvals in respect of the Elect acquisition on terms satisfactory to Biron.

Biron will complete a share consolidation and pre-emptive capital raising prior to the completion of the transaction. The minimum amount of capital to be raised by Biron to complete the transaction has being set at $3 million and must comply with chapter 1 & 2 of the ASX listing rules. This amount is subject to change prior to completion and may change the capital structure.

Level
17,
499
St
Kilda
Road,
Melbourne
Vic
3004
Phone
+61
398667889

Description of Elect Group Pty Ltd

Elect is an agribusiness company trading as JC Tanloden, which is a hay processing, trading and export business that has an operating history of over 15 years in regional Victoria. Since Elect’s involvement in and ownership of the JCT business it has provided the financial, management, marketing needs of the business and has consolidated its customer base in North Asia while increasing its presence in the growing Chinese market. Elect and JCT now has an experienced management and workforce with the expertise to manage, operate and market the future growth of the JCT business.

Based in the northern Victorian region, in a major regional centre, the operation site is central to the bulk of hay suppliers in the region and enjoys excellent road access to the Port of Melbourne.

JCT purchases suitable freshly cut hay and straw direct from farmers under various purchase supply contracts, the hay from the farmers is presently delivered to the JCT hay processing plant in northern Victoria and then JCT processes the hay (Cleaning, fumigating, re-bailing to size and packaging) into export quality hay ready for the customers. JCT organises all the logistics to export the hay in containers through the Melbourne port to the various markets under sales contracts.

JCT mainly produces Oaten Hay, Wheaten Hay, Lucerne Hay and Wheaten Straw to focus on the North Asia markets with its traditional markets being Japan and Taiwan, and recently expansion into the Korea and China markets. JCT has forged a strong reputation over the years delivering premium quality hay to its customers.

For the financial year 2013/14 JCT exported approximately 17,000 Tons of product to the above markets.

Biron and Elect are considering an expansion into the bigger Western Australian agribusiness and hay market to help meet some of the growing market demands and also reduce some of the agricultural risks associated with growing crops/hay and producing premium hay (weather/disease).

The agribusiness market that Elect and JCT presently operates in is continuing to expand, where generally global hay demand outstrips supply.

• Australia presently exports over 700,000 tons (valued in excess of A$200 million) of oaten hay each year, with Western Australia (WA) the largest exporter, exporting an average 48% of Australia’s oaten hay, (Approx. 300 000 tons valued in excess of A$90 million). Victoria presently exports approx. 17% of Australian oaten hay.

• Exports of hay and straw have shown significant growth during the past 15 years. These exports are primarily to Japan, Taiwan and Korea however in the past 5 years China and the UAE have being increasing their imports of Australian hay.

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• About 400,000 - 500,000 tons of oaten hay are exported to Japan from Australia each year and is the major export market.

• Most hay exported to Asian markets is used for the dairy sector but is also used for beef cows and horses. Hay exported to the Middle East is primarily used to feed these same animals as well as camels, sheep and goats.

Change of Activities

The completion of the Elect transaction will constitute a change to the principal activities of Biron, and accordingly Biron will be required to:

1. Comply with the requirements of chapter 11 of the ASX listing Rules;

2. Obtain shareholder approval for the proposed transaction;

3. Issue a prospectus and otherwise satisfy the listing requirements of Chapter 1 and 2 of the ASX Listing Rules as though Biron was undertaking an initial public offering.

Consolidation of Shares

As part of the change of activities and the application of Chapter 1 and 2 of the ASX Listing Rules, Biron will undertake a consolidation of its issued capital.

As the securities of Biron have not been traded for a numerous years it is proposed the share capital of Biron be consolidated on a 50:1 basis. The final Consolidation Ratio will be confirmed at a later date.

A pro forma post-completion capital structure is attached below which illustrates the impact of the proposed transaction and consolidation. If the Consolidation Ratio changes, and/or the capital raised changes then the pro forma capital structure will change.

Financial Position of Merger Entity

Auditors have been appointed to audit Elect & JCT accounts for the last 3 completed financial years. This financial information will be disclosed in the Prospectus.

Biron will prepare a pro forma balance sheet of the merged entity once the audits for Elect and Biron have been completed.

Biron once in receipt of the audited accounts will provide a Pro Forma Balance Sheet to the market that will show the financial position of the merged entities.

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Board Composition

Biron, once the transaction is completed, will be appointing a new board with the relevant experience, expertise and competences for the management of an ASX listed public company with this category of business and will be able to drive the new Biron forward.

Biron will announce the new board once all appointments are secured.

Pre-emptive Capital Raising

Biron has raised $50,000 by a convertible loan that will be converted post consolidation by the issue of 500,000 shares at an issue price of 10 cents post consolidation. The funds raised will be used to complete the previous compliance issues outstanding.

In order to fund the due diligence on Elect, audit of Biron’s accounts, payment of all Biron’s outstanding creditors, payment of a refundable deposit (by way of a loan $200,000) to Elect and to provide working capital to fund Biron during the period to completion of the acquisition of Elect, Biron proposes to raise $400,000 by a convertible loan that will be converted by the issue of 3,200,000 shares at an issue price of 12.5 cents post consolidation.

The above shares will be subject to shareholder approval.

Pro Forma Capital Structure

Biron Apparel Limited

Share currently on Issue(Pre Consolidation)	413,294,170
(Post special general meeting 27 January 2015)
Proposed Consolidation 50:1	8,265,883
Shares on Issue Post Consolidation	8,265,883
Pre-Emptive Capital Raising Shares	3,700,000
(500,000 at 10 cents and 3,200,000 at 12.5 cents)
Vendor Shares (Elect) ($4m @ 20 cents)	20,000,000
Proposed Shares on Issue Post Transaction	31,965,883

Ownership Structure Post Transaction Initial Shareholders 37% Vendors (Elect) 63% Total 100%

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Proposed Shares Issued Post Capital Raising 46,965,883

Capital Raising Shares

Shares Issued from Capital raising ($3m @ 20 cents) 15,000,000

Ownership Structure	Post Capital Raising
Initial Shareholders	25%
Vendors (Elect)	32%
New Shareholders	43%
Total	100%

Proposed Timetable

Item	Subject	Date
1.	Announcement of Proposed Transaction	13 May 2015
2.	Appointment of Expert	13 May 2015
3.	Completion of due diligence	25 May 2015
4.	Completion of Pre-emptive capital raising	25 May 2015
5.	Receipt of Expert Report	10 June 2015
6.	Dispatch of Notice of Meeting	16 June 2015
7.	Shareholder Meeting	16 July 2015
8.	Completion of Prospectus	21 July 2015
9.	Consolidation	23 July 2015
10.	Despatch of post consolidation notices to shareholders	25 July 2015
11.	Last day of Prospectus fund raising	21 August 2015
12.	Issue of fund raising shares	25 August 2015
13.	Despatch of notices to new shareholders	1 Sept. 2015

The above timetable is indicative only and is subject to changes without notice.

For further information contact

George Karafotias

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