On Thursday, Edison Lithium Corp. (OTC:EDDYF) emerged as one of the companies to have made a major new announcement, and this morning, it may be a good idea to get a closer perspective on it. The company announced that it had entered into an agreement with Edison Cobalt Corp., its fully owned subsidiary unit, with regards to a spin-out.
In the news release, it was noted that there would be a distribution of the common shares of Edison Cobalt Corp. By way of the distribution, the shareholders of Edison Lithium Corp. would also become shareholders in Edison Cobalt thanks to a statutory arrangement aligned with the Business Corporations Act of British Columbia.
The company also shared some of the major highlights of the transaction. A total of around 18,553,916 shares in Edison Cobalt would be distributed to shareholders of Edison Lithium Corp. The shares would be distributed on the basis of one share in Edison Cobalt for one share in Edison Lithium Corp. held by a shareholder on the share distribution record date. There would not be any change in the holdings of the Edison Lithium Corp. shareholders as a consequence of the arrangement. Once the distribution is completed, the shareholder will own shares in both entities.
The company noted that it expected the arrangement to lead to a boost in shareholder value since it would allow the markets to assign a valuation to its Kittson Cobalt Property independently. Due to the spin-out, the valuation would not be linked to the alkali dispositions and lithium properties of Edison Lithium Corp.
Edison Cobalt would become a reported issuer in Ontario, British Columbia, and Alberta provinces once the arrangement is completed. Additionally, Edison Lithium Corp. also noted that it would also look into the possibility of listing the shares of Edison Cobalt on the TSX Venture Exchange.