Reco International Announces Successful Completion of Plan of Arrangement

EDMONTON, ALBERTA--(Marketwired - Apr 9, 2015) - Reco International Group Inc. (TSX VENTURE:RGI) (the "Corporation") is pleased to announce that the Corporation has received TSX Venture Exchange final approval of the statutory plan of arrangement dated as of January 16, 2014 (the "Arrangement") involving a spin-out of Reco Southern Alberta Inc. ("Reco Southern"), Reco Central Alberta Inc. ("Reco Central") and Reco Northern Alberta Inc. ("Reco Northern") which are all incorporated pursuant to the laws of Alberta and will each be reporting issuers in Alberta (collectively the "Spin-Out Companies").

Pursuant to the Arrangement, the Corporation will direct certain non-core business assets ("Assets") to the Spin-Out Companies for the dual purpose of permitting the Corporation to focus on its core business while at the same time allowing the Spin-Out Companies to more efficiently develop the business opportunities associated with such Assets. The Spin-Out Companies have as their main assets exclusive territorial agencies for the sale of light steel prefabricated homes manufactured by Shenzhen China Modular Building Investment Co. Ltd.

The shareholders of the Corporation approved the Arrangement at its annual and special meeting held on May 8, 2014 with the final order of the Court of Queen's Bench of Alberta being granted on May 16, 2014. The Articles of Arrangement have been filed with the Registrar of Corporations for the Province of Alberta on March 18, 2015 after receipt of final approval from the TSX Venture Exchange.

In consideration for the Corporation directing the Assets to the Spin-Out Companies, the Corporation has received common shares in each of Reco Southern, Reco Central and Reco Northern (the "Distributed Reco Shares"), and the number of Distributed Reco Shares owned by the Corporation of each of the Spin-Out Companies will equal the number of issued and outstanding common shares of the Corporation and will be effective as of April 8, 2015.

Each currently issued common share of the Corporation will be exchanged for one (1) Class A common share ("Class A Common Share") of the Corporation which in turn will be exchanged for one new common share of the Corporation ("New Share") and one Class A Preferred Share of the Corporation ("Class A Preferred Share"). The Corporation will issue a total of 25,635,635 New Shares which will continue to be listed on the TSX Venture Exchange and the Corporation's trading symbol of "RGI" will remain intact. The holders of the Class A Common Shares will be removed from the central securities register of the Corporation and will be added to the central securities register as the holders of the number of New Shares and Class A Preferred Shares that they have received on the exchange.

The Corporation will redeem the issued 25,635,635 Class A Preferred Shares (which are unlisted) for consideration consisting solely of the Distributed Reco Shares such that each holder of Class A Preferred Shares will receive that number of common shares in each of Reco Southern, Reco Central and Reco Northern that is equal to the number of Class A Preferred Shares.

At the Corporation's Annual and Special Meeting of the Shareholders ("Annual and Special Meeting") for the financial year ended September 30, 2013 held on Friday, November 21, 2014 as scheduled, the shareholders of the Corporation confirmed and ratified: (i) a redesignation of the Corporation's authorized capital of 25,635,635 common shares by altering the identifying name from common shares to class A shares without any other change to the share rights; and (ii) to amend the articles of the Corporation by creating a new series of an unlimited number of preferred shares designated as "Class A Preferred Shares", both transactions which are pursuant to and in connection with the Plan of Arrangement.

Also in connection with the Plan of Arrangement, the shareholders approved at the Annual and Special Meeting a special resolution to amend the authorized capital of the Corporation by creating three new series of an unlimited number of preferred shares designated as Preferred Series I Shares, Preferred Series II Shares and Preferred Series III Shares with the preferred shares having the rights, privileges, restrictions and conditions substantially as attached as Schedule B to the Information Circular.

In connection with the Plan of Arrangement and as further consideration for Distributed Reco Shares, on April 8, 2015 the directors of the Corporation passed a resolution effective April 8, 2015 approving a series of Share Exchange Agreements which encompasses a dividend in kind whereby the Corporation issues 25,635,635 Preferred Series I Shares, 25,635,635 Preferred Series II Shares and 25,635,635 Preferred Series III Shares in exchange for 25,635,635 common shares of Reco Northern, 25,635,635 common shares of Reco Central, and 25,635,635 common shares of Reco Southern, respectively.

On April 8, 2015, the Corporation filed the necessary Articles of Amendment to give full effect to the Arrangement.

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