CALGARY, AB, Oct. 24, 2022 /CNW/ - Tidewater Renewables Ltd. ("Tidewater Renewables" or the "Corporation") (TSX: LCFS) and Alberta Investment Management Corporation ("AIMCo") are pleased to announce the closing of a $150 million five-year senior secured second lien credit facility (the "AIMCo Facility") with an affiliate of AIMCo, on behalf of certain of its clients.
The AIMCo Facility's term is five years, maturing on October 24, 2027 and at closing was drawn down by way of a single advance with net proceeds reflecting a 5% original issue discount. The AIMCo Facility will bear initial interest of 6.50% per annum (the "Base Interest Rate"), payable semi-annually. The Base Interest Rate will increase by 37.5 basis points in year four and five and is subject to certain inflation escalators, with a potential maximum cash coupon of approximately 8.50% by year five. As part of the AIMCo Facility, Tidewater Renewables issued 3.375 million warrants to AIMCo (the "AIMCo Warrants"). Each AIMCo Warrant entitles AIMCo to purchase one common share ("Common Share") of Tidewater Renewables at a price per share of $14.84, for a term of five years. The exercise price reflects a 50% premium to the 10-day volume weighted average trading price of the Common Shares prior to closing of the AIMCo Facility. The AIMCo Warrants have a cashless exercise feature, which, if elected, can limit future dilution as in such circumstances only Common Shares for the in-the-money value of the Warrants are issued.
Proceeds of the AIMCo Facility will be used by Tidewater Renewables to repay 100% of the outstanding drawn credit under the Corporation's senior credit facility, repay 100% of the outstanding drawn credit on the previously disclosed RNG credit facility (the "RNG Facility") as well as enable the cancelation of the RNG Facility, for working capital, general corporate purposes, and for growth projects.
"AIMCo's investment in Tidewater Renewables represents a rare opportunity for our clients to invest in renewable fuels, supporting the energy transition through a first-mover advantage in renewable fuels projects while ensuring long-term return objectives are met. We look forward to working with the high caliber management team in place at Tidewater Renewables and supporting the organization through its next phase of growth," said Ben Hawkins, Head, Infrastructure, Renewables & Sustainable Investing.
"When Tidewater Renewables completed its IPO in August 2021, we successfully capitalized our business to execute on our near-term growth program which included funding the acquisition of pre-existing operating assets, as well as the development of our Canola Co-Processing Project, FCC Co-Processing Project, and the Renewable Diesel & Renewable Hydrogen complex (the "HDRD Complex"). Fast-forward 14 months later and we have successfully commissioned both co-processing projects ahead of schedule, continue to progress our flagship HDRD Complex, and entered a highly strategic RNG and Feedstock partnership, all while delivering consistent outperformance on our existing assets. We are excited to partner with a strategic long-term institutional investor in AIMCo and look forward to growing our partnership with AIMCo." said Joel MacLeod, Executive Chairman and CEO of the Corporation.
The AIMCo Warrants also have two unique features: (1) If the consumer price index is greater than 4% per annum prior to a repayment of all or part of the AIMCo Facility, then the exercise price of the Warrants will be reduced by $2.00 per share go forward for that number of Warrants proportional to the amount of principal repaid. (2) AIMCo has the option to elect to be paid in cash (versus Common Shares) in connection with a cashless exercise. If the Corporation is unable or not permitted to make some or all of such cash payment, then the Corporation will assist AIMCo in the sale of the Common Shares issued upon such cashless exercise, with such sales to take place within 10 business days, and will be obligated to pay AIMCo certain market slippage costs (i.e. the difference between the trading price at the commencement of such sale process (the "Market Price") and the sale price actually received by AIMCo) of up to 15% of the Market Price (with unsold Common Shares being deemed to have such maximum slippage) plus broker fees and related costs in respect of Common Shares sold. If the Corporation is not permitted to make some or all of such cash payments in connection with such sale process, then the Corporation is obligated to issue AIMCo Common Shares on a private placement basis having a value equal to such unpaid amounts and applying the maximum pricing discounts permitted by the Toronto Stock Exchange ("TSX"). For the unique feature in (2) approval of the Corporation's shareholders is required by the TSX. As Tidewater Midstream and Infrastructure Ltd. owns approximately 69% of the Common Shares, it is able to provide such approval by giving its written consent, which it has done, in accordance with the exemption set forth in Section 604(d) of the TSX Company Manual. Accordingly, and as provided for in Section 604(d) of the TSX Company Manual, such unique feature will not be in effect until five business days after the issuance of this press release (which has been approved by the TSX) provided such written consent has been provided to the TSX by such time.
INFOR Financial Inc. and National Bank Financial Inc. served as exclusive financial advisors to Tidewater Renewables in connection with the AIMCo Facility.
Forward-Looking Information
This news release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") that relate to the Corporation current expectations and views of future events. These forward-looking statements relate to future events or the Corporation's future performance. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumption or future events or performance (often, but not always, through the use of words or phrases such as "will likely result", "are expected to", "expects", "will continue", "is anticipated", "anticipates", "believes", "estimated", "intends", "plans", "forecast", "projection", "strategy", "objective" and "outlook") are not historical facts and may be forward -looking statements and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this new release should not be unduly relied upon. These statements speak only as of the date of this new release. In particular and without limitation, this news release contains forward-looking statements pertaining to Tidewater Renewables' business as described under the heading "About Tidewater Renewables" below. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Corporation's control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risk Factors" in the Corporation's supplemented PREP prospectus dated August 12, 2021, filed on SEDAR. Tidewater Renewables' does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable laws.
ABOUT ALBERTA INVESTMENT MANAGEMENT CORPORATION (AIMCo)
Alberta Investment Management Corporation, AIMCo, is one of Canada's largest and most diversified institutional investment managers with CAD $168.3 billion of assets under management, as of December 31, 2021. AIMCo invests globally on behalf of 32 pension, endowment and government funds in the Province of Alberta.
AIMCo's Infrastructure group manages a portfolio of over CAD $14 billion in investments, comprised primarily of long-term equity positions in OECD-based infrastructure assets. These assets typically provide essential services to the public and are either regulated or have highly contracted revenues with the potential for long-term capital appreciation. AIMCo infrastructure investments are intended to match long duration real return asset characteristics with inflation-indexed pension liabilities.
For further information:
mediarelations@aimco.ca
ABOUT TIDEWATER RENEWABLES
Tidewater Renewables is traded on the TSX under the symbol "LCFS". Tidewater Renewables is a multi-faceted, energy transition company. The Corporation is focused on the production of low carbon fuels, including renewable diesel, renewable hydrogen, and renewable natural gas, as well as carbon capture through future initiatives. The Corporation was created in response to the growing demand for renewable fuels in North America and to capitalize on its potential to efficiently turn a wide variety of renewable feedstocks (such as tallow, used cooking oil, distillers corn oil, soybean oil, canola oil and other biomasses) into low carbon fuels. Tidewater Renewables' objective is to become one of the leading Canadian renewable fuel producers. The Corporation is pursuing this objective through the ownership, development, and operation of clean fuels projects and related infrastructure, utilizing existing proven technologies. Organically, Tidewater Renewables will seek to leverage the existing infrastructure owned by Tidewater Midstream and Infrastructure Ltd. and in-house operational and engineering expertise, regarding the development of the Corporation's portfolio of greenfield and brownfield capital projects as well as the expansion of the Corporation's product offerings. Additional information relating to Tidewater Renewables is available on SEDAR at www.sedar.com and at www.tidewater-renewables.com.
SOURCE Tidewater Renewables Ltd.
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