/NOT FOR DISTRIBUTION TO U.S. NEWSWIRES OR FOR
DISSEMINATION IN THE UNITED
STATES/
Equity strengthens NFI's balance sheet and
will reduce leverage, improve liquidity, and position the company
to capitalize on operational enhancements and growth
opportunities
WINNIPEG, MB, March 1, 2021 /CNW/ - (TSX:
NFI) NFI Group Inc. ("NFI" or the "Company"), one
of the world's leading independent bus and coach manufacturers,
today announced the closing of the previously announced bought deal
offering of 8,446,000 common shares (the "Shares") at a price of
C$29.60 per Share for total gross
proceeds to the Company of C$250,001,600 (the "Offering").
Scotiabank, BMO Capital Markets and CIBC Capital Markets, acted
as joint bookrunners for the Offering, with a syndicate of
underwriters which included National Bank Financial, TD Securities,
Bank of America, ATB Capital Markets, Laurentian Securities and
Stifel GMP (collectively, the "Underwriters").
The Company intends to immediately use the net proceeds of the
Offering to reduce the outstanding balance under its revolving
credit facilities. This is expected to strengthen NFI's balance
sheet, reduce leverage and interest expense and significantly
increase liquidity. NFI believes that this will provide the Company
with additional financial flexibility to pursue its operational and
strategic goals, such as investments in NFI's zero-emission
products and electric propulsion technology, investments required
under the previously disclosed NFI Forward cost-reduction
initiative and other potential growth opportunities.
This news release does not constitute an offer of securities for
sale in the United States. The
securities being offered have not been, nor will they be,
registered under the United States Securities Act of 1933, as
amended, and such securities may not be offered or sold within
the United States absent U.S.
registration or an applicable exemption from U.S. registration
requirements.
About NFI
NFI is a leading independent global bus manufacturer providing a
comprehensive suite of mass transportation solutions in ten
countries under brands: New Flyer® (heavy-duty transit
buses), Alexander Dennis Limited (single and double-deck buses),
Plaxton (motor coaches), MCI® (motor coaches),
ARBOC® (low-floor cutaway and medium-duty buses), and
NFI Parts™. NFI vehicles incorporate the widest range of drive
systems available including: clean diesel, natural gas,
diesel-electric hybrid, and zero-emission electric (trolley,
battery, and fuel cell). In total, NFI now supports over 105,000
buses and coaches currently in service around the world.
Leveraging 450 years of combined experience, NFI is leading the
battery-electric transition of mass mobility around the world. With
zero-emission buses and coaches, infrastructure, and technology,
NFI meets today's urban demands for scalable smart mobility
solutions. Together, NFI is enabling more livable cities through
connected, clean, and sustainable transportation.
NFI common shares are traded on the Toronto Stock Exchange under
the symbol NFI. Further information is available at
www.nfigroup.com, www.newflyer.com, www.mcicoach.com,
www.arbocsv.com, www.nfi.parts, and www.alexander-dennis.com.
Forward-Looking Statements
Certain statements in this press release are "forward-looking
statements", which reflect the expectations of management regarding
the intended use of proceeds of the Offering, Company's future
growth, financial performance and results of operations and the
Company's strategic initiatives, plans, business prospects and
opportunities, including the duration, impact of and recovery from
the COVID-19 pandemic. The words "believes", "views",
"anticipates", "plans", "expects", "intends", "projects",
"forecasts", "estimates", "guidance" and "targets", "may", "will"
and similar expressions are intended to identify forward looking
statements. These forward-looking statements reflect management's
current expectations regarding future events (including the
recovery of the Company's markets and the expected benefits to be
obtained through its "NFI Forward" initiative) and the Company's
financial and operating performance and speak only as of the date
of this press release. Forward-looking statements involve
significant risks and uncertainties, should not be read as
guarantees of future events, performance or results, and will not
necessarily be accurate indications of whether or not or the times
at or by which such performance or results will be achieved.
A number of factors that may cause actual results to differ
materially from the results discussed in the forward-looking
statements include: the Company may not be able to achieve its
targets for sales growth; funding may not continue to be available
to the Company's customers at current levels or at all; the
Company's business is affected by economic factors and adverse
developments in economic conditions could have an adverse effect on
the for the Company's products and the results of its operations;
currency fluctuations could adversely affect the Company's
financial results or competitive position; interest rates could
change substantially, materially impacting the Company's revenue
and profitability; an active, liquid trading market for the
Company's common shares (the "Common Shares") may cease to exist,
which may limit the ability of shareholders to trade Common Shares;
the market price for the Common Shares may be volatile; if
securities or industry analysts do not publish research or reports
about the Company and its business, if they adversely change their
recommendations regarding the Common Shares or if the Company's
results of operations do not meet their expectations, the Common
Share price and trading volume could decline; in addition, if
securities or industry analysts publish inaccurate or unfavorable
research about the Company or its business, the Common Share price
and trading volume of the Common Shares could decline; competition
in the industry and entrance of new competitors; current
requirements under "Buy America" regulations may change and/or
become more onerous or suppliers' "Buy America" content may change;
failure of the Company to comply with the U.S. Disadvantaged
Business Enterprise ("DBE") program requirements or the failure to
have its DBE goals approved by the U.S. Federal Transit
Administration; absence of fixed term customer contracts, exercise
of options and customer suspension or termination for convenience;
local content bidding preferences in the
United States may create a competitive disadvantage;
uncertainty resulting from the exit of the UK from the European
Union; requirements under Canadian content policies may change
and/or become more onerous; operational risk resulting from
inadequate or failed internal processes, people and/or systems or
from external events, including fiduciary breaches, regulatory
compliance failures, legal disputes, business disruption,
pandemics, floods, technology failures, processing errors, business
integration, damage to physical assets, employee safety and
insurance coverage; international operations subject the Company to
additional risks and costs and may cause profitability to decline;
dependence on limited sources or unique sources of supply;
dependence on supply of engines that comply with emission
regulations; a disruption, termination or alteration of the supply
of vehicle chassis or other critical components from third-party
suppliers could materially adversely affect the sales of certain of
the Company's products; the Company's profitability can be
adversely affected by increases in raw material and component
costs; the Company may incur material losses and costs as a result
of product warranty costs, recalls and remediation of transit buses
and motor coaches; production delays may result in liquidated
damages under the Company's contracts with its customers;
catastrophic events may lead to production curtailments or
shutdowns; the Company may not be able to successfully renegotiate
collective bargaining agreements when they expire and may be
adversely affected by labour disruptions and shortages of labour;
the Company's operations are subject to risks and hazards that may
result in monetary losses and liabilities not covered by insurance
or which exceed its insurance coverage; the Company may be
adversely affected by rising insurance costs; the Company may not
be able to maintain performance bonds or letters of credit required
by its contracts or obtain performance bonds and letters of credit
required for new contracts; the Company is subject to litigation in
the ordinary course of business and may incur material losses and
costs as a result of product liability claims; the Company may have
difficulty selling pre-owned coaches and realizing expected resale
values; the Company may incur costs in connection with regulations
relating to axle weight restrictions and vehicle lengths; the
Company may be subject to claims and liabilities under
environmental, health and safety laws; dependence on management
information systems and cyber security risks; the Company's ability
to execute its strategy and conduct operations is dependent upon
its ability to attract, train and retain qualified personnel,
including its ability to retain and attract executives, senior
management and key employees; the Company may be exposed to
liabilities under applicable anti-corruption laws and any
determination that it violated these laws could have a material
adverse effect on its business; the Company's risk management
policies and procedures may not be fully effective in achieving
their intended purposes; internal controls over financial
reporting, no matter how well designed, have inherent limitations;
there are inherent limitations to the effectiveness of any system
of disclosure controls and procedures, including the possibility of
human error and the circumvention or overriding of the controls and
procedures; ability to successfully execute strategic plans and
maintain profitability; development of competitive or disruptive
products, services or technology; development and testing of new
products or model variants; acquisition risk; reliance on
third-party manufacturers; third-party distribution/dealer
agreements; availability to the Company of future financing; the
Company may not be able to generate the necessary amount of cash to
service its existing debt, which may require the Company to
refinance its debt; the restrictive covenants in the credit
facilities could impact the Company's business and affect its
ability to pursue its business strategies; payment of dividends is
not guaranteed; a significant amount of the Company's cash is
distributed, which may restrict potential growth; the Company is
dependent on its subsidiaries for all cash available for
distributions; future sales or the possibility of future sales of a
substantial number of Common Shares may impact the price of the
Common Shares and could result in dilution; if the Company is
required to write down goodwill or other intangible assets, its
financial condition and operating results would be negatively
affected; income tax risk due to the Company's operations being
complex and income tax interpretations, regulations and legislation
that pertain to its activities are subject to continual change;
investment eligibility and Canadian federal income tax risks;
certain U.S. tax rules may limit the ability of NF Holdings and its
U.S. subsidiaries (the "NF Group") to deduct interest expense for
U.S. federal income tax purposes and may increase the NF Group's
tax liability and certain financing transactions could be
characterized as "hybrid transactions" for U.S. tax purposes, which
could increase the NF Group's tax liability.
Factors relating to the global COVID-19 pandemic include: the
magnitude and duration of the global, national and regional
economic and social disruption being caused as a result of the
pandemic; the impact of national, regional and local governmental
laws, regulations and "shelter in place" or similar orders relating
to the pandemic which may materially adversely impact the Company's
ability to continue operations; partial or complete closures of
one, more or all of the Company's facilities and work locations or
the reduction of production rates (including due to government
mandates and to protect the health and safety of the Company's
employees or as a result of employees being unable to come to work
due to COVID-19 infections with respect to them or their family
members); production rates may be further decreased as a result of
the pandemic; supply delays and shortages of parts and components
and disruption to labour supply as a result of the pandemic; the
pandemic will likely adversely affect operations of customers and
reduce and delay, for an unknown period, customers' purchases of
the Company's products; the anticipated recovery of the Company's
markets in the future may be delayed or increase in demand may be
lower than expected as a result of the continuing effects of the
pandemic; the Company's ability to obtain access to additional
capital if required; and the Company's financial performance and
condition, obligations, cash flow and liquidity and its ability to
maintain compliance with the covenants under its credit
facilities, which may also negatively impact the ability of the
Company to pay dividends. There can be no assurance that the
Company will be able to maintain sufficient liquidity for an
extended period, obtain future satisfactory covenant relief under
its credit facilities, if required, or access to additional capital
or access to government financial support or as to when production
operations will return to previous production rates. There is also
no assurance that governments will provide continued or adequate
stimulus funding during or after the pandemic for public transit
agencies to purchase transit vehicles or that public or private
demand for the Company's vehicles will return to pre-pandemic
levels in the anticipated period of time. The Company cautions that
due to the dynamic, fluid and highly unpredictable nature of the
pandemic and its impact on global and local economies, businesses
and individuals, it is impossible to predict the severity of the
impact on the Company's business, operating performance, financial
condition and ability to generate sufficient cash flow and maintain
adequate liquidity and any material adverse effects could very well
be rapid, unexpected and may continue for an extended and unknown
period of time.
Factors relating to the Company's "NFI Forward" initiative
include: the Company's ability to successfully execute the
initiative and to generate the planned savings in the expected time
frame or at all; management may have overestimated the amount of
savings and production efficiencies that can be generated or may
have underestimated the amount of costs to be expended; the
implementation of the initiative may take longer than planned to
achieve the expected savings; further restructuring and
cost-cutting may be required in order to achieve the objectives of
the initiative; the estimated amount of savings generated under the
initiative may not be sufficient to achieve the planned benefits;
combining business units and/or reducing the number of production
or parts facilities may not achieve the efficiencies anticipated;
and the impact of the continuing global COVID-19 pandemic. There
can be no assurance that the Company will be able to achieve the
anticipated financial and operational benefits, cost savings or
other benefits of the initiative.
The Company cautions that the foregoing factors are not
exhaustive of all potential risks. These factors and other risks
and uncertainties are discussed in the Company's press releases,
Annual Information Form and materials filed with the Canadian
securities regulatory authorities which are available on SEDAR at
www.sedar.com. Due to the potential impact of these and other
factors, the Company disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, unless
required by applicable law.
SOURCE NFI Group Inc.