LGC Capital Announces Merchant Banking Division and New Opportunity

LGC Capital Ltd.
Symbol: TSX-V: LG

MONTREAL, Oct. 10, 2017 /CNW Telbec/ - LGC Capital Ltd. (TSXV: LG) ("LGC") is pleased to announce that it has formally established a merchant banking division within its business, which will pursue global high-yield investment opportunities. This new division will run parallel with and will not deter efforts from LGC's cannabis investments and the pursuit of additional cannabis opportunities.

"The merchant banking side of LGC Capital is an outstanding opportunity for the company and its shareholders," commented John McMullen, CEO of LGC. "I will remain 100% committed and focused on building our global cannabis footprint, while LGC's Co-Chairman Mazen Haddad will head up this division and continue to pursue large high-yield investment opportunities for LGC. Mazen has a successful history and track record with sourcing funding and executing these types of transactions."

As part of this announcement, LGC announces that it has entered into an agreement with a Toronto-based investment firm whereby LGC will guarantee repayment by Etea Sicurezza Group Ltd ("Etea Sicurezza") of notes issued by Etea Sicurezza in an aggregate principal amount of USD $1,000,000 ("Notes"). The Notes have a term of two years, bear interest at a rate equal to LIBOR + 8%, and are secured by the assets of Etea Sicurezza and by a pledge of shares by Etea Sicurezza's principal shareholder.

As consideration for the guarantee, Etea Sicurezza will issue shares to LGC representing 3% of its outstanding shares and pay an annual cash fee to LGC.

LGC and Etea Sicurezza are also negotiating a transaction whereby LGC will acquire all of the outstanding shares of Etea Sicurezza and distribute a portion of the shares to LGC's shareholders, with the intention of Etea Sicurezza becoming a public listed company. At such time, if any, as LGC and Etea Sicurezza enter into an agreement, LGC will issue a press release announcing the details of the transaction.

Based in London, England, Etea Sicurezza (www.eteasicurezzagroup.com) is a private company which specializes in fire safety and security by providing products and services to international companies such as L'Oreal, Coca Cola, BASF, Doha Metro and others. Etea Sicurezza was founded in 1998 and is now a global leader in the field of high-tech safety with offices in seven countries and agents in 20 countries. Etea Sicurezza operates as an EPC (Engineering, Procurement and Construction) contractor implementing safety systems, and provides proprietary and patented technologies that are customized and fully compliant with international standards. For the fiscal year ending December 31, 2017, Etea Sicurezza already has revenues in excess of the equivalent of CAD$14 million with margins of 27%.

"I have known the founder and principal of Etea Sicurezza for a number of years," stated Mazen Haddad, Co-Chairman of LGC. "He approached me on this situation and I jumped on it knowing that LGC can help and that this opportunity can add significant value for our shareholders."

Under the guarantee, LGC will be required to pay all of Etea Sicurezza's obligations under the Notes if Etea Sicurezza does not make payment to the holders of the Notes and if AIP sends a demand letter to LGC. If LGC repays the Notes, it will be subrogated in the rights of the holders of the Notes. In the event that LGC is required to pay under the guarantee, it has the option to pay all or part of the amount through the issuance of LGC shares at a price per share equal to 80% of the weighted average trading price of LGC's shares on the TSX Venture Exchange, or such other stock exchange on which LGC's shares then principally trade, for the five trading days immediately preceding the date of issuance of the shares.

The guarantee and related issuance of shares by LGC are subject to approval by the TSX Venture Exchange. LGC Merchant Banking has begun the approval process but cannot give any assurance that it will be able to obtain such approval. In addition, LGC cannot give any assurance that it will conclude a further transaction with Etea Sicurezza as described in this press release.

About LGC Capital (http://www.lgc-capital.com)

LGC Capital Ltd.'s (TSXV: LG) mission is to invest into global high-yield diversified businesses. LGC's flagship project is its partnership with AfriAg (Pty) Ltd. and South Africa's House of Hemp to grow, cultivate and distribute medical-grade cannabis from its 40,000 m² facility located in Block D of the Dube Tradeport's Agrizone Complex. This greenhouse is the most eco-friendly and high tech agricultural facility in Africa.

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements with respect to LGC Capital Ltd. ("LGC"), its operations, strategy, investments, financial performance and condition. These statements generally can be identified by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe" or "continue" or the negative thereof or similar variations. The actual results and performance of LGC, including the guarantee and possible further transaction with Etea Sicurezza described herein, could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, government regulation and the factors described under "Risk Factors and Risk Management" in LGC's Management's Discussion and Analysis for the fiscal year ended September 30, 2016, as filed on SEDAR (www.sedar.com). The cautionary statements qualify all forward-looking statements attributable to LGC and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release and LGC has no obligation to update such statements, except to the extent required by applicable securities laws.

Information Relating to Etea Sicurezza Group Ltd

All information contained in this press release relating to Etea Sicurezza has been provided to LGC by Etea Sicurezza.  LGC has relied upon this information without having made independent inquiries as to its accuracy or completeness and assumes no responsibility for any inaccuracy or incompleteness of such information.

Caution Regarding Press Releases

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE LGC Capital Ltd