Birch Hill Equity Partners to Acquire Units in Tidewater Midstream and Infrastructure Ltd.

TORONTO, Aug. 3, 2022 /CNW/ - Birch Hill Equity Partners Management Inc., as general partner of each of Birch Hill Equity Partners V, LP, Birch Hill Equity Partners (US) V, LP and Birch Hill Equity Partners (Entrepreneurs) V, LP (collectively, "Birch Hill"), has entered into a subscription agreement (the "Subscription Agreement") with Tidewater Midstream and Infrastructure Ltd. ("Tidewater" or the "Company") pursuant to which Birch Hill will acquire 14,166,667 units ("Units") of Tidewater at a price of $1.20 per Unit for aggregate consideration of $17,000,000 (the "Private Placement"). Each Unit will consist of one common share of the Company (the "Common Shares") and one-half of one Common Share purchase warrant of the Company (each full warrant, a "Warrant"). Each Warrant will entitle the holder to acquire one Common Share from the Company at a price of $1.44 per Common Share for a period of 24 months following the closing of a concurrent bought deal offering (the "Offering", and together with the Private Placement and the other private placements disclosed by the Company in its July 27, 2022 press release, the "Concurrent Equity Offerings"). The Concurrent Equity Offerings are cross-conditional and are subject to a number of conditions, including the approval of the Toronto Stock Exchange. The Concurrent Equity Offerings are expected to close on or around August 16, 2022.

Pursuant to the Subscription Agreement, Birch Hill has the option to subscribe for additional Units, Common Shares, Warrants or any combination of such securities (the "Securities") on a pro rata basis in proportion and to the extent that the underwriters' over-allotment option to the Offering is exercised (the "Private Placement Option").

Birch Hill currently owns and exercises control or direction over 81,336,771 Common Shares, representing approximately 23.8% of the issued and outstanding Common Shares. After giving effect to the closing of the Concurrent Equity Offerings (the closings of which are cross-conditional), Birch Hill will own and exercise control or direction over 95,503,438 Common Shares and 7,083,333 Warrants, representing approximately 23.1% of the issued and outstanding Common Shares on a non-diluted basis and approximately 24.4% of the issued and outstanding Common Shares on a partially-diluted basis (that is, assuming the exercise of all Warrants held by Birch Hill). During the period prior to the closing of the Concurrent Equity Offerings, Birch Hill will own and exercise control or direction over (or be deemed to own and exercise control or direction over) approximately 26.8% of the issued and outstanding Common Shares on a non-diluted basis and 28.3% of the issued and outstanding Common Shares on a partially-diluted basis (that is, assuming the exercise of all Warrants held by Birch Hill, but excluding Securities to be issued pursuant to the other Concurrent Equity Offerings).

Birch Hill is participating in the Private Placement for investment purposes.

In addition, the Company and Birch Hill have entered into a commitment agreement providing the Company with an option to draw down, prior to November 30, 2022, up to $15 million of second lien debt (the "Second ‎Lien Facility"). The Second Lien Facility could be used to reduce the borrowings under the Company's senior credit facility if the ‎Company does not reduce such facility through other means prior to November 30, 2022.

It is a condition to closing of the Offering and Private Placement that the Company and Birch Hill enter into definitive documentation in respect of the Second Lien Facility. However, the Company has indicated it is seeking support of the lenders under its credit facilities for the termination of the requirement to enter into definitive documentation in respect of the Second Lien Facility and termination of the Second Lien Facility commitment prior to closing of the Offering. If such lender support is obtained (and certain participants in the other private placements disclosed by the Company in its July 27, 2022 press release and Birch Hill agree to the removal of this condition for their benefit in their respective Subscription Agreements), Birch Hill understands that the Company's intent would be not to enter into the definitive documentation in respect of the Second Lien Facility or have access to the Second Lien Facility.

An updated early warning report will be electronically filed with the applicable securities commissions in each jurisdiction where Tidewater is reporting and will be available on SEDAR at www.sedar.com. 

SOURCE Birch Hill Equity Partners Management Inc.