Axis Auto Finance Announces Closing of Financing with Total Proceeds of Approximately $25 Million
TORONTO, March 22, 2018 /CNW/ - Axis Auto Finance Inc. (TSXV:AXIS) ("Axis" or the "Company"), is pleased to announce that it has completed its previously announced private placement financing (the "Offering") of subscription receipts ("Subscription Receipts") and extendible convertible unsecured subordinated debentures ("Debentures"). Pursuant to the Offering, Axis issued a total of: (i) 10,440,784 subscription receipts ("Subscription Receipts") at a price of $0.70 per Subscription Receipt for gross proceeds of approximately $7.3 million; and (ii) $14.55 million aggregate principal amount of Debentures, with an additional $3 million in aggregate principal amount of Debentures to be issued as described herein, for aggregate total gross proceeds of approximately $24.85 million. The syndicate of underwriters (the "Underwriters") was co-led by Canaccord Genuity Corp. and INFOR Financial Inc. and included PI Financial Corporation and Raymond James Ltd.
Subscription Receipts
Each Subscription Receipt represents the right to receive one common share of Axis (the "Common Shares") without payment of additional consideration or further action, following the closing of the proposed acquisition of Trend Financial Corp. (the "Transaction"). The gross proceeds (less 50% of the Underwriters' commission payable on the Subscription Receipts) have been placed in escrow pending closing of the Transaction. If the Transaction is closed on or before 5:00 p.m. (Toronto time) on July 20, 2018 (or such later date as Axis and the Underwriters may agree) (the "Escrow Release Deadline") the escrowed funds (less the balance of the Underwriters commission) will be released to Axis. Axis will use such funds towards the cash consideration payable pursuant to the Transaction. The remaining cash portion of the Transaction purchase price will be funded using the net proceeds of the issuance of the Debentures, with any excess amounts being used for general working capital purposes.
If the Transaction is not completed by the Escrow Release Deadline; the share purchase agreement relating to the Transaction is terminated at an earlier time; or Axis advises the Underwriters or announces to the public that it does not intend to proceed with the Transaction (the earliest to occur being the "Termination Date"), holders of Subscription Receipts will be returned an amount per Subscription Receipt equal to the offering price plus a pro rata share of the interest earned on the escrowed funds, if any, net of any applicable withholding taxes.
The Subscription Receipts are not listed or posted for trading on any exchange and are subject to a statutory four-month and a day hold.
Extendible Convertible Debentures
The Debentures have an initial maturity date of the Termination Date, which will be automatically extended to March 31, 2023 upon the closing of the Transaction. The Debentures were issued at a par value of $1,000 and have an interest rate of 7.50% per annum, payable semi-annually in arrears on the last day of June and December in each year commencing on June 30, 2018. Subject to the trust indenture governing the Debentures (the "Indenture"), the Debentures will be convertible at the holder's option at any time after the Transaction closing date and prior to the close of business on the earlier of the business day immediately preceding the March 31, 2023 and the date specified by Axis for redemption of the Debentures, into fully paid and non-assessable Common Shares at a conversion price of $0.95 per Common Share, subject to adjustment in accordance with the Indenture. The Debentures will not be redeemable prior to March 31, 2021. On and after March 31, 2021 and prior to March 31, 2022, the Debentures may be redeemed in whole in or in part from time to time, on not more than 60 days and not less than 30 days prior notice, at a price equal to the principal amount plus accrued and unpaid interest, provided that the volume weighted average on the TSX Venture Exchange for the 20 consecutive trading days preceding the date on which to notice of redemption is given is not less than 125% of the conversion price. On or after March 31, 2022, the Debentures will be redeemable in whole or in part at Axis' option at any time up to March 31, 2023.
The issuance of the remaining $3 million principal aggregate amount of Debentures shall be purchased by certain vendors of Trend Financial Corp. with a portion of the cash received by such vendors pursuant to the Transaction and will be issued simultaneously with the closing of the Transaction. The Transaction is expected to be completed on or about April 2, 2018 and is subject to customary closing conditions, including the receipt of all applicable regulatory approvals.
The Debentures are not listed or posted for trading on any exchange and are subject to a statutory four-month and a day hold.
About Axis Auto Finance
Axis provides non-standard financing options targeting roughly 30% of Canadians (Source: Equifax) that do not qualify for traditional bank-type financing for their used vehicle purchase. Through personalized service and a commitment to building strong, long-lasting relationships with dealer partners, Axis continues to be one of Canada's fastest-growing auto-financing companies.
Further information on the Company can be found at www.axisautofinance.ca.
The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward looking Information
Certain information in this press release may constitute forward-looking information. Such forward-looking information includes, without limitation, the anticipated closing date of the Transaction, the receipt of all applicable regulatory approvals and the satisfaction of all unsatisfied closing conditions in connection with the Transaction and the participation of the vendors of Trend Financial Corp. in the Debenture offering. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in the Company's filings with the Canadian securities regulators, available at www.sedar.com.
SOURCE Axis Auto Finance Inc.
Axis Auto Finance Inc., Ilja Troitschanski, President, (416) 633-5626, [email protected]
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