THIS PRESS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWS AGENCIES
MONTREAL, Feb. 26, 2020 (GLOBE NEWSWIRE) -- Goodfood Market Corp. (“Goodfood” or the “Company”) (TSX: FOOD) is pleased to announce that it has closed its previously announced public offering (the “Offering”) of $30,000,000 aggregate principal amount of 5.75% convertible unsecured subordinated debentures of the Company (the “Debentures”) due March 31, 2025, at a price of $1,000 (the “Offering Price”) per $1,000 principal amount of Debentures, through a syndicate of underwriters co-led by National Bank Financial Inc. and Desjardins Capital Markets (together, the “Co-Lead Underwriters”), and including Canaccord Genuity Corp., Raymond James Ltd., RBC Dominion Securities Inc., Stifel Nicolaus Canada Inc., TD Securities Inc., Eight Capital and Industrial Alliance Securities Inc. (collectively with the Co-Lead Underwriters, the “Underwriters”).
The Debentures will bear interest at a rate of 5.75% per annum, payable semi-annually on March 31 and September 30 of each year, commencing on September 30, 2020. The Debentures will be convertible at the holder’s option into Goodfood common shares (the “Common Shares”) at a conversion price of $4.70 per Common Share, representing a conversion rate of 212.7660 Common Shares per $1,000 principal amount of Debentures. The Debentures will be direct, subordinated unsecured obligations of the Company, subordinated to any senior indebtedness of the Company, including the Company's revolving credit facility, and ranking equally with one another and with all other existing and future subordinated unsecured indebtedness of the Company to the extent subordinated on the same terms. The Debentures will mature on March 31, 2025 and may be redeemed by Goodfood, in certain circumstances, on or after March 31, 2023. The Debentures will be listed and posted for trading on the Toronto Stock Exchange under the symbol “FOOD.DB” at the opening of markets today.
An over-allotment option granted by the Company to the Underwriters for $4,500,000 aggregate principal amount of additional Debentures at the Offering Price remains exercisable by the Underwriters, in whole or in part, at any time until 30 days after the date hereof.
The Company intends to use the net proceeds from the Offering to fund the buildout of a new Toronto production and distribution facility, to further investments in capital projects (including automation related capital projects) at its existing production facilities in Montreal, Calgary and Vancouver as well as Toronto, and for general corporate purposes.
Mr. Donald Olds, a director of the Company, has purchased $50,000 principal amount of Debentures under the Offering. The participation of Mr. Olds is considered to be a “related party transaction” as defined in Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The participation of such insider is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the securities issued to such insiders nor the consideration for such securities exceeds 25% of the Company’s market capitalization. The Company did not file a material change report 21 days prior to closing of the Offering as the details of the participation of insiders of the Company in the Offering had not been confirmed at that time. The Offering, including the insider participation therein, has been approved by the board of directors of the Company.
The Debentures offered, and the Common Shares issuable on conversion, redemption or maturity thereof, have not and will not be registered under the U.S. Securities Act of 1933, as amended (the “1933 Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the 1933 Act. This press release does not constitute an offer to sell or a solicitation of any offer to buy Debentures or Common Shares in the United States.