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OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION
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VANCOUVER, BC, Aug. 3, 2021 /CNW/ - GreenFirst Forest Products
Inc. (TSXV: GFP) (TSXV: GFP.RT) ("GreenFirst" or the
"Company") announces that on July 30,
2021 it completed its previously announced offering (the
"Rights Offering") of rights (the "Rights"). The
Rights Offering was over-subscribed, resulting in the issuance
of 111,665,880 subscription receipts (the "Subscription
Receipts") at an exercise price of $1.50 per Right for gross proceeds of
$167,498,820. All amounts are in
Canadian dollars unless indicated otherwise.
The Subscription Receipts will be listed on the TSX Venture
Exchange ("TSXV") under the symbol "GFP.R". Trading of the
Subscription Receipts is expected to commence on or about
August 6, 2021.
"This is a tremendous development for GreenFirst. The enthusiasm
of our shareholders is overwhelming and the successful rights
offering puts us on the right track with a view to close our
previously announced acquisition at the end of August" said
Paul Rivett, Chairman of
GreenFirst.
Each Subscription Receipt will be automatically exchanged,
without payment of additional consideration or further action by
the holders thereof, for one common share in the capital of the
Company (a "Common Share") upon the delivery by the Company
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 Company's
previously announced proposed acquisition of a portfolio of forest
and paper product assets (the "Acquisition").
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 July 2, 2021 and
will, if the Escrow Release 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 agreement giving effect to the Acquisition 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 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 consideration for providing the backstop commitment in
connection with the Rights Offering, Senvest Management, LLC
(together with its affiliates and funds of which Senvest
Management, LLC acts as investment manager, the "Standby
Purchaser") has been issued as of today 15,692,500 warrants to
acquire Common Shares for a period of five years and at an exercise
price of $3.18, and has been 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.
GreenFirst intends to provide later today on its website
https://gffp.ca/faq additional details concerning the Rights
Offering, including setting out the number of Subscription Receipts
issued pursuant to each of the basic subscription privilege and the
additional subscription privilege (which is expected to be subject
to pro ration). The Standby Purchaser acquired its minimum
number of Subscription Receipts and no further funding was required
under the backstop commitment. In connection with the Rights
Offering, fractional Subscription Receipts and Common Shares will
not be issued.
Upon exchange of the Subscription Receipts for Common Shares,
GreenFirst expects a total of approximately 148,887,840 Common
Shares will be issued and outstanding (or 180,640,458 on a
fully-diluted basis, assuming the exercise of all outstanding
options, warrants and other convertible, exchangeable or
exercisable securities). Based on the results of the Rights
Offering, the Standby Purchaser is expected to own 41,846,667
Common Shares carrying 28.11% of the outstanding voting rights in
respect of all of the issued and outstanding shares of the Company,
and therefore has become a new insider and Control Person (as such
term is defined under the policies of the TSXV) of the Company.
The TSXV has conditionally approved the Acquisition.
Additional details concerning the Acquisition, the Rights
Offering, the Subscription Receipts, the standby commitment and
related matters are described in the final prospectus, 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 Subscription Receipts, Common Shares or other
securities of GreenFirst. 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.
Early Warning Report
Pursuant to the Rights Offering, Larry
G. Swets, Jr. (306 N Maple St, Itasca, Illinois 60143) ceased to have
ownership and control of 2,119,734 Rights. By the expiry time (the
"Expiry Time") of the Rights Offering, Mr. Swets, Jr.
exercised 950,334 Rights at an exercise price of $1.50 per Right for aggregate consideration of
$1,425,501, gaining ownership and
control of 950,334 Subscription Receipts. Prior to and following
the Expiry Time, 37,221,960 Common Shares were issued and
outstanding.
Prior to the Expiry Time, Mr. Swets, Jr. beneficially owned or
controlled 4,409,947 Common Shares (representing approximately
11.85% of the outstanding Common Shares) and 2,119,734 Rights
(representing approximately 16.6% of the outstanding Common Shares
on a partially diluted basis, assuming only the exercise of the
Rights held by Mr. Swets, Jr.).
Following the Expiry Time, Mr. Swets, Jr. beneficially owned or
controlled 4,409,947 Common Shares (representing approximately
11.85% of the outstanding Common Shares) and 950,334 Subscription
Receipts (representing approximately 14.0% of the outstanding
Common Shares on a partially diluted basis, assuming only the
exercise of the Rights held by Mr. Swets, Jr.).
The exercise of the Rights occurred pursuant to the terms of the
Rights Offering and the Subscription Receipts were issued by the
Company. The remaining securities held by Mr. Swets, Jr. are held
for investment purposes, and in the future, the Mr. Swets, Jr. may
discuss with management and/or the board of directors of the
Company any of the transactions listed in clauses (a) to (k) of
item 5 of Form F1 of National Instrument 62-103 – The Early
Warning System and Related Take-over Bid and Insider Reporting
Issues and may further purchase, hold, vote, trade, dispose or
otherwise deal in the securities of the Company, in such manner as
deemed advisable to benefit from changes in market prices of the
Company's securities, publicly disclosed changes in the operations
of the Company, its business strategy or prospects or from a
material transaction of the Company.
An early warning report will be filed by Larry G. Swets, Jr. in accordance with
applicable securities laws and will be available on SEDAR at
www.sedar.com or may be obtained directly from the Company upon
request at 847-791-6817 (Attention: Michael
Liggett) or mailing the Company at its head office: 1800 –
510 West Georgia Street, Vancouver,
British Columbia, V6B 0M3.
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
Rights Offering (including the basic subscription privilege and the
additional subscription privilege), 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) and TSXV matters (including with respect to approval of
certain matters relating to the Company, as well as the listing of
the Subscription Receipts). 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 Products Inc.