Shareholders approve Tropic oil merger

Shareholders of Tropic Networks, Chamaelo Exploration and Tournament Energy have approved a three-way merger that would combine the two Canadian energy firms and give the optical networking vendor enough cash to fund operations for nine more months.

In meetings yesterday, Tournament shareholders unanimously voted in support of the plan along with 99.9% of votes cast by Chamaelo investors. All of Tropic’s shareholders voted on Dec. 22 to approve the plan, which will give them a 1% stake in the post-merger Chamaelo in exchange for their current Tropic shares plus a proportionate stake in a reborn Tropic Networks.

The parties will seek court approval Jan. 3, 2006, and hope to seal the deal two days later.

Through the deal, Tropic’s assets will be transferred to a new corporate entity that will be renamed Tropic Networks and continue operations as before, the company said. Tropic’s equity and its “loss carry-forwards” will be transferred to Chamaelo, giving the Canadian oil firm tax credits to apply to future earnings. In exchange, Tropic will receive about $9.4 million in cash (in Canadian dollars, or about $8.1 million U.S.), which Tropic said should support its operations through September 2006 while it searches for more funding.