/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE
SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION
DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO
THE UNITED STATES./
VANCOUVER, BC, July 2, 2021 /CNW/ - GreenFirst Forest Products
Inc. ("GreenFirst" or the "Company") announced today
that it has filed with the securities regulatory authorities in
each of the provinces and territories of Canada and obtained a receipt for a final
prospectus in respect of the previously announced rights offering
to shareholders of the Company (the "Rights Offering") for
gross proceeds of up to approximately $167,500,000. The Rights Offering is being
completed in connection with the Company's acquisition of a
portfolio of forest and paper product assets (the
"Acquisition"). All amounts are in Canadian dollars unless
indicated otherwise.
Under the terms of the Rights Offering, shareholders of the
Company will each receive three rights (the "Rights") for
each common share in the capital of the Company (the "Common
Shares") as at 5:00 p.m. (Eastern
time) on July 9, 2021 (the
"Record Date"). Each Right will entitle the holder thereof
to subscribe for one subscription receipt of the Company
("Subscription Receipts") upon the payment of the exercise
price of $1.50 per Right (the
"Exercise Price"). The Subscription Receipts will be
automatically exchanged, without payment of additional
consideration or further action by the holders thereof, for one
Common Share for each Subscription Receipt held, subject to
delivery of a release notice (the "Escrow Release
Condition") to Computershare Trust Company of Canada (the "Subscription Receipt
Agent") constituting confirmation of the satisfaction or waiver
of all of the conditions to the completion of the Acquisition by
9437-6001 Québec Inc. (the "Acquisition Entity"), a
wholly-owned subsidiary of the Company, of certain property and
assets (the "Purchased Assets") substantially on the terms
and conditions as set out in the asset purchase agreement (the
"Acquisition Agreement") dated as of April 10, 2021 among the Company, the Acquisition
Entity, Rayonier A.M. Canada G.P. and Rayonier A.M. Canada
Industries Inc., other than the payment of the purchase price
payable pursuant to the Acquisition Agreement (the "Purchase
Price") and such other conditions which by their nature are not
capable of being satisfied until completion of the Acquisition. The
Rights Offering will include an additional subscription privilege
entitling holders of Rights who have fully exercised their Rights
to subscribe for additional Subscription Receipts, if available,
that are not otherwise subscribed for under the Rights
Offering.
The gross proceeds less the expenses and costs relating to the
Rights Offering, and all interest thereon, if any, will be placed
into escrow pursuant to a subscription receipt agreement (the
"Subscription Receipt Agreement") with the Subscription
Receipt Agent dated as of the date of the final prospectus and
will, if the Escrow Released Condition is satisfied or waived, be
released to the Company, or as the Company directs, immediately
prior to the closing date of the Acquisition and be used: (i) to
make payment of all or a portion of the Purchase Price; and (ii) to
the extent of any balance remaining, for capital expenditures,
including those associated with the Purchased Assets, general
working capital and other corporate purposes.
If the Acquisition Agreement is terminated at any earlier time
or if the Escrow Release Condition is not satisfied by the earlier
of: (i) the date on which the Subscription Receipt Agent receives a
termination notice in accordance with the terms of the Subscription
Receipt Agreement; and (ii) the first business day after
October 1, 2021 (the "Termination
Date"), holders of the Subscription Receipts issuable upon the
exercise of the Rights shall, commencing on the third business day
following the Termination Date, be entitled to receive from the
Subscription Receipt Agent an amount equal to the aggregate
Exercise Price thereof plus their pro rata share of all
interest thereon, if any, less applicable withholding taxes, if
any.
In connection with the Rights Offering, fractional Subscription
Receipts and Common Shares will not be issued.
The period during which Rights may be exercised under the Rights
Offering will begin on the Record Date and end at 5:00 p.m. (Eastern time) (the "Expiry
Time"), or such later time as determined by the Company, on
July 30, 2021 (the "Expiry
Date"). Rights not fully exercised prior to the Expiry Time on
the Expiry Date will be void and of no further value. The existing
Common Shares will commence trading "ex-rights" on the TSX Venture
Exchange ("TSXV") starting at the open of markets on
July 8, 2021. While there can be no
certainty concerning GreenFirst's share price, it is expected that
GreenFirst's share price will fall when the Common Shares begin
trading ex-rights to reflect that that the Common Shares no longer
include the Rights, which trade separately.
Commencing on July 8, 2021, the
Rights will be listed on the TSXV under the symbol "GFP.RT" and
will continue to be posted for trading on the TSXV until noon
(Toronto time) on the Expiry Date,
at which time they will cease trading. The Rights Offering and the
terms of the Rights are subject to regulatory approval, including
approval of the TSXV. The TSXV has conditionally approved the
listing of the Rights.
In connection with the Rights Offering, GreenFirst has entered
into a standby purchase agreement with Senvest Management, LLC
(together with its affiliates and funds of which Senvest
Management, LLC acts as investment manager, the "Standby
Purchaser") pursuant to which the Standby Purchaser has agreed
to purchase, at the Exercise Price, all Subscription Receipts that
are not otherwise subscribed for under the Rights Offering such
that at least $94,155,000 of
Subscription Receipts are issued. Certain directors and officers of
GreenFirst have agreed with the Standby Purchaser that they will
not exercise all or a portion of their Rights or will transfer
their Rights to the Standby Purchaser in the event the backstop
commitment amount is less than approximately $62,770,000 to ensure that the Standby Purchaser
will hold a minimum of 41,846,666 Subscription Receipts. In
consideration for providing the backstop commitment, the Standby
Purchaser has been granted 15,692,500 warrants to acquire Common
Shares for a period of five years and at an exercise price of
C$3.18. The Standby Purchaser will
also be granted customary nomination rights in respect of one
independent director and customary registration rights for so long
as it holds at least 15% of the issued and outstanding Common
Shares.
Subject to applicable law, a DRS advice and Rights subscription
form, together with the final prospectus, will be distributed to
all eligible registered shareholders of the Company holding Common
Shares as at the Record Date. A DRS advice and Rights subscription
form will not be distributed to shareholders who appear to be
located in the United States
unless, and until, such person becomes an Approved Eligible Holder,
in accordance with the procedures set out in the final
prospectus.
Additional details concerning the Acquisition, the Rights
Offering, the Subscription Receipts, the standby commitment and
related matters are described in the final prospectus, which has
been filed under the Company's profile on SEDAR at
www.sedar.com.
This press release is not an offer to sell or the solicitation
of an offer to buy Rights, Subscription Receipts or Common Shares.
Such securities may not be offered or sold in the United States absent registration under
the United States Securities Act of 1933, as amended, or an
applicable exemption from the registration requirements.
About GreenFirst:
GreenFirst is a forest-first business, focused on
environmentally sustainable forest management and lumber
production. We believe that sustainable forest planting and
harvesting, coupled with the long-term green advantage of lumber,
provide GreenFirst with significant cyclical and secular advantages
in building products. GreenFirst's long-term pursuit is to be a
global leader in environmentally sustainable lumber. For more
information, please visit: www.gffp.ca.
Advisors:
Norton Rose Fulbright Canada LLP is acting as legal counsel to
GreenFirst, RBC Capital Markets is acting as financial advisor to
GreenFirst and Goodmans LLP is acting as legal counsel to Senvest
Management, LLC.
Forward-Looking Information:
Certain information in this news release constitutes
forward-looking statements under applicable securities laws. Any
statements that are contained in this news release that are not
statements of historical fact are forward-looking statements.
Forward looking statements are often identified by terms such as
"may", "should", "anticipate", "expect", "potential", "believe",
"intend", "estimate" or the negative of these terms and similar
expressions. Forward-looking statements in this news release
include, but are not limited to, statements with respect to the
proposed Rights Offering (including the terms, conditions, timing,
anticipated use of proceeds, completion thereof and the standby
commitment with the Standby Purchaser), statements with respect to
the proposed Acquisition (including the terms, conditions, timing
and completion thereof), the satisfaction, if at all, of the Escrow
Release Condition (including on the anticipated terms, conditions
and timing), TSXV matters (including with respect to listing of
certain securities of the Company), statements with respect to the
share price of the Common Shares and statements with respect to
distribution of materials to registered shareholders in connection
with the Rights Offering. Forward-looking statements are based on
assumptions, including expectations and assumptions concerning:
interest and foreign exchange rates; capital efficiencies, the
lumber industry (and its growth and growth rates) in North America, and the Company's future plans
and ability to complete future investments. While the Company
considers these assumptions to be reasonable, based on information
currently available, they may prove to be incorrect. Readers are
cautioned not to place undue reliance on forward-looking
statements. In addition, forward-looking statements necessarily
involve known and unknown risks, including, without limitation,
risks associated with general economic conditions; adverse industry
events; future legislative, tax and regulatory developments.
Readers are cautioned that the foregoing list is not exhaustive
and other risks are set out in the Company's public disclosure
record filed under the Company's profile on www.sedar.com. Readers
are further cautioned not to place undue reliance on
forward-looking statements as there can be no assurance that the
plans, intentions or expectations upon which they are placed will
occur. Such information, although considered reasonable by
management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those anticipated.
Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement and reflect our
expectations as of the date hereof, and thus are subject to change
thereafter. 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, except as
required by law.
Neither TSXV nor its Regulation Services Provider (as that
term is defined in policies of the TSXV) accepts responsibility for
the adequacy or accuracy of this news release.
SOURCE GreenFirst Forest Product Inc.