GreenFirst Files Final Prospectus in Respect of Rights Offering

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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.