/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR
FOR DISSEMINATION IN THE UNITED
STATES/
EDMONTON, AB, Feb. 16, 2021 /CNW/ - Blackheath Resources Inc.
(TSXV: BHR) ("Blackheath") and Wolverine Energy and
Infrastructure Inc. ("Wolverine") (TSXV: WEII) today
announced that they have entered into an amalgamation and
arrangement agreement dated February 16,
2021 for the proposed sale of Wolverine's clean energy
assets, renewable natural gas ("RNG") development projects
and solids recycling facilities (the "Clean Energy Assets")
to Blackheath for total proceeds of $150.0
million (the "Transaction"). The $150.0 million in proceeds from the sale of the
Clean Energy Assets will be paid as to $50
million in cash, with the remainder of such proceeds
comprised of shares of Blackheath (as constituted following the
Transaction). As a step in the Transaction, Blackheath will
change its name to Green Impact Partners Inc. ("GIP").
The Transaction will constitute a Reverse Take Over ("RTO")
of Blackheath under the policies of the TSX Venture Exchange (the
"Exchange").
Overview of the GIP and the Transaction
The Transaction will occur by way of a plan of arrangement under
Section 193 of the Business Corporations Act (Alberta) (the "Plan of Arrangement")
and is expected to close prior to April 30,
2021.
Following completion of the Transaction, GIP will operate with a
focus on renewable energy through by-products, waste water and
carbon reduction. The commitment to the UN's sustainable
development goals 5, 6, 7 and 12 to provide clean water and
sanitation, affordable and clean energy and responsible consumption
and production of resources are expected to be the driving force of
investment and growth decisions for GIP.
Following completion of the Transaction, GIP's operations will
focus on creating value from by-products through acquiring,
developing and optimizing technology and operating high quality
assets. GIP's business will focus on energy transition and
universal by-product management, deploying proven technologies to
capitalize on expanding programs for alternatives to carbon
emitting fuels. GIP will have a strategic presence in key markets
in North America and intends to
act quickly on opportunities with its understanding of incentives
and other industry structures. In addition, the expected management
of GIP firmly believes that repurposing its by-product and energy
infrastructure will be key to achieving Global emission
targets.
GIP will operate under the following core principles:
- Significant and Sustainable Environmental Impact
- GIP's business will be focussed on clean energy projects with
the most significant environmental impacts and a net zero Earth
impact, when assessed in light of the full project.
- GIP will pursue scalable and growth-oriented businesses,
focused on repurposing and recycling by-product in a sustainable
manner with measurable, long-term metrics for the reduction of
emissions.
- Late-Stage and/or Proven Technology
- GIP's business will focus on late-stage and/or proven
technology such as RNG capture, waste heat recovery and
agrivoltaics projects .
- GIP will strive to reduce development risk and place the focus
on optimizing the usage of existing technology.
- In-House Expertise to Manage and Operate Projects
- Established, dedicated project management team or the ability
to integrate and consolidate with existing operations groups.
- Using best-in-class processes, principles and operations to
drive a best-in-class Environmental, Social and Governance
("ESG") rating.
- Best in Class ESG Procedures
- GIP will adopt best-in-class ESG principles and operations.
With ESG as one of GIP's founding principles, ESG will be a
fundamental part of what GIP does.
- GIP will be committed to gender equality and diversity on its
Board and senior executive team. This commitment to leadership
diversity will continue to promote a culture of diversity and
equality throughout the entire organization.
- All reporting by GIP is to be completed to SASB Standards.
- Financial Metrics – Projected Return on Capital Deployed
- All of GIP's business platforms will be focused on projects
that are assessed by management as having the potential to achieve
a superior risk-adjusted return on capital employed ("ROCE")
through full life cycle asset management by acting
opportunistically to optimize overall portfolio performance.
- GIP will seek to repurpose existing infrastructure to minimize
Earth impact and maximize returns.
The Clean Energy Assets are comprised of: (i) seven water
treatment and recycling and waste management facilities acquired by
Wolverine in February 2019 and
located in Alberta, Saskatchewan and the
United States; and (ii) the assets of Wolverine that are
associated with the clean energy development projects currently
being undertaken by Wolverine. The collective Clean Energy
Assets constitute an operating ESG and renewables business focused
on universal by-product management, by-products-to-energy, storage,
and by-product utilization using proven technologies to capitalize
on expanding programs for alternatives to carbon emitting fuels.
Clean energy development projects currently being pursued and
representing opportunities for growth available to GIP include
those relating to water recycling, US solids recycling, clean
energy development projects and clean energy marketing.
Examples of such projects include an RNG project using dairy manure
as a feedstock in the United
States and an RNG project using forestry by-products as a
feedstock in Canada. Management of GIP have additionally
identified a significant number of locations, sites, facilities and
expansion projects that represent attractive future opportunities
for growth.
GIP, as a stand alone business, would have had over $151 million in revenue, assets of $84 million, liabilities of $56 million and net profit of $4 million, on an audited basis, as at and for
the year ended March 31, 2020 and
would have had $59 million in
revenue, assets of $83 million,
liabilities of $58 million and net
profit (loss) of ($1 million), on an
unaudited basis, for the nine month period ended December 31, 2020. Following completion of the
Transaction the Clean Energy Assets will be owned by GIP on a debt
free basis.
About Green Impact Partners
GIP is intended to be an industry leading ESG and renewables
company which will be listed on the Exchange, and incorporated
under the laws of British
Columbia.
Prior to completion of the Transaction, Blackheath will
consolidate its outstanding common shares on an approximately 1 to
48.8 basis, such that immediately prior to completion of the
Transaction, and following the exercise of all outstanding options
and warrants of Blackheath, Blackheath shall have
300,000 shares outstanding, as indicated in the table below
(the "Consolidation"), and assuming a $10.00 price per Subscription Receipt (as defined
herein) issued under the Concurrent Financing (as described
below). The Consolidation ratio will be further adjusted to
reflect any changes in the offering price for the Subscription
Receipts such that the Blackheath and Wolverine shareholders will
maintain the same economic interest in GIP after giving effect to
the Transaction.
The following table outlines the anticipated share capital of
GIP on a post-Consolidation basis following the completion of the
Consolidation, the Transaction and the Concurrent Financing (as
defined below), based on both the minimum and maximum amounts of
such Concurrent Financing and various possible prices for the
Subscription Receipts to be issued pursuant to such Concurrent
Financing.
|
GIP Shares
Outstanding, Post-
Transaction
(Minimum
Concurrent
Financing)
|
GIP Shares
Outstanding, Post-
Transaction
(Maximum
Concurrent
Financing)
|
Price per
Subscription Receipt pursuant to Concurrent Financing
|
$10.00
|
$10.00
|
Outstanding GIP
shares (post-Consolidation)
|
300,000
|
300,000
|
GIP shares issuable
to Wolverine pursuant to the Plan of Arrangement
|
5,150,000
|
5,150,000
|
GIP shares issuable
to Wolverine shareholders pursuant to the Plan of
Arrangement
|
4,850,000
|
4,850,000
|
GIP shares issuable
pursuant to the Concurrent Financing
|
10,000,000
|
12,000,000
|
Total Issued and
Outstanding
|
20,300,000
|
22,300,000
|
GIP shares reserved
for issuance under Blackheath stock options
|
0
|
0
|
GIP shares underlying
warrants to purchase Blackheath shares
|
0
|
0
|
Total Issued and
Outstanding (fully-diluted)
|
20,300,000
|
22,300,000
|
|
|
|
The initial members of the board of directors of GIP following
completion of the Transaction will be selected by Wolverine and
management of GIP will include Jesse
Douglas, the current President and Chief Executive Officer
of Wolverine. The current directors and officers of
Blackheath shall resign on completion of the Transaction.
The board of directors of GIP is expected to be fixed at five
directors on completion of the Transaction, or as soon as
practicable thereafter. The names and backgrounds of all
persons who will constitute principals or insiders of GIP after
giving effect to the Transaction will be disclosed once they are
determined, in accordance with the requirements of the
Exchange.
Upon completion of the Transaction GIP shall operate the
business associated with the Clean Energy Assets and Wolverine will
continue to operate its current services business, other than those
services related to the Clean Energy Assets.
Terms of the Transaction and Concurrent Financing
Pursuant to the Transaction, Wolverine will transfer the Clean
Energy Assets to a wholly-owned subsidiary of Wolverine, and
Wolverine will undertake a reorganization of its share capital
which will result in such subsidiary being owned by a newly
incorporated entity ("SpinCo"). The shares of SpinCo
will be owned by the shareholders of Wolverine.
Pursuant to the Transaction, Blackheath will then acquire the
Clean Energy Assets indirectly through the amalgamation of SpinCo,
the wholly-owned subsidiary of Wolverine, and Green Impact Partners
Operating Corp., a wholly-owned subsidiary of Blackheath (the
"Amalgamation"). The Amalgamation will constitute a step in,
and form an integral part of, the Plan of Arrangement. The
Transaction is expected to result in Wolverine receiving
$50,000,000 in cash and, as per
the table above, 5,150,000 shares of GIP representing approximately
23% of the outstanding shares of GIP, assuming the Concurrent
Financing (as described below) is fully subscribed and Subscription
Receipts are issued at a price of $10.00 per Subscription Receipt. The
remainder of the consideration for the Clean Energy Assets, being
4,850,000 shares of GIP (representing approximately 22% of GIP's
outstanding shares, assuming the Concurrent Financing is fully
subscribed and Subscription Receipts are priced at $10.00 per Subscription Receipt) will be
distributed directly to Wolverine shareholders pursuant to the
terms of the Plan of Arrangement. The GIP shares issuable to
Wolverine and its shareholders have a deemed value equal to the
price of the Subscription Receipts issued pursuant to the
Concurrent Financing, being a value of approximately $10.00 per share.
Prior to, and as a condition of, completion of the Transaction,
Blackheath, Green Impact Operating Corp. and Wolverine have engaged
RBC Capital Markets, as sole bookrunning agent on behalf of a
syndicate of agents (collectively, the "Agents"), to act as
agent on a commercially reasonable efforts basis in connection with
a brokered private placement offering of subscription receipts
("Subscription Receipts") of Green Impact Operating Corp.
for gross proceeds of between $100,000,000 and $120,000,000 (the "Concurrent
Financing"). The Concurrent Financing will be priced at
an appropriate price at the commencement of marketing of the
Subscription Receipts, which is expected to be approximately
$10.00 per Subscription
Receipt.
The gross proceeds from the Concurrent Financing will be held in
escrow pending the completion of the Transaction which is expected
to close prior to April 30, 2021. If
all conditions to the completion of the Transaction are satisfied
on or before May 31, 2021, the net
proceeds from the sale of the Subscription Receipts will be
released from escrow to Green Impact Operating Corp. and each
Subscription Receipt will be exchanged through a series of steps
under the Plan of Arrangement for one share of GIP. If the
Transaction is not completed on or before May 31, 2021 or is terminated at an earlier time,
then the purchase price for the Subscription Receipts will be
returned to subscribers, together with a pro rata portion of
interest, if any, earned on the escrowed funds.
Closing of the Concurrent Financing is expected to occur during
the week of March 8, 2021 and is
subject to customary conditions and regulatory approvals. The
Agents will receive a cash commission of 6.0% of the gross proceeds
of the Concurrent Financing. Such commission will be payable
upon satisfaction of the escrow release conditions and the exchange
of Subscription Receipts or the termination time of the
Transaction, whichever occurs first, provided that only 50% of such
commission shall be payable in the event that the escrow release
conditions and the
exchange of Subscription Receipts is not completed and the
termination time of the Transaction occurs.
The net proceeds of the Concurrent Financing will be used to
complete the Transaction and pay the cash portion of the
consideration for the Clean Energy Assets, finance future growth
projects, primarily in renewable natural gas, anaerobic digestion
and other clean energy projects, as well as for general working
capital purposes.
Cormark Securities Inc. and Haywood Securities Inc. were engaged
by Green Impact Partners Inc. as strategic advisors. Stifel
FirstEnergy was engaged by Green Impact Partners Inc. as financial
advisor. PillarFour Capital Inc. was engaged by Wolverine
Energy and Infrastructure Inc. as financial advisor. All
financial and strategic advisors are paid on a working basis by GIP
and Wolverine accordingly.
The Transaction is subject to a number of conditions, including
amongst others:
- Receipt of all necessary regulatory and third-party consents,
authorizations and approvals, including the approval of 66-2/3% of
the votes cast by the Wolverine shareholders present in person or
by proxy at a meeting of Wolverine shareholders to be called to
approve the Plan of Arrangement;
- Completion of the Consolidation and the Concurrent Financing
and satisfaction of the escrow release conditions for the
Concurrent Financing; and
- Completion of satisfactory due diligence by each of Wolverine
and Blackheath.
The Transaction does not require the approval of the
shareholders of Blackheath as it satisfies the requirements of
Section 4.1 (a) through (d) of Exchange Policy 5.2, however the
approval of shareholders of Blackheath is required for the
Consolidation. Such approval is intended to be achieved
through written consent in accordance with the policies of the
Exchange. The Transaction constitutes an arm's length
transaction for purposes of the rules of the Exchange.
Trading in shares of Blackheath has been halted in accordance
with the policies of the Exchange and will remain halted until such
time as all required documentation has been filed and accepted by
the Exchange and permission to resume trading has been obtained
from the Exchange.
About Wolverine Post Transaction
Management of Wolverine believes that the sale of Wolverine's
Clean Energy Assets for an expected value of $150.0 million is in the best interest for
Wolverine shareholders and that following the closing of the
Transaction Wolverine will be strongly positioned to continue its
focus on driving shareholder value, through accretive acquisitions
and technological developments.
Nikolaus Kiefer, Chief Financial
Officer of Wolverine, stated: "The assets contemplated for sale
have a meaningful environmental and social impact. The additional
capital expenditures to fully develop these assets are important
next steps to maximize the inherent value in the assets, however
the timely completion of the development of these assets would have
proven to be difficult with the cost of capital that Wolverine
currently employs. Wolverine believes that the best way to
achieve shareholder value was through a deleveraging transaction
that also allowed for future upside. Given the continued
uncertainty in the sector this transaction will allow Wolverine to
focus on its core EBITDA driving businesses while substantially
reducing the overhead that comes with green technology and
developments."
Wolverine Senior Management Changes
Subject to completion of the Transaction, Jesse Douglas, Wolverine's President and Chief
Executive Officer, will accept the Executive Chairman role of
Wolverine and will resign as President and Chief Executive
Officer.
Wolverine is excited to announce the promotion, effective as at
the closing of the Transaction, of Shannon
Ostapovich to President and Chief Executive Officer. Mr.
Ostapovich has been with Wolverine since 2015 upon vending in a
wholly-owned subsidiary of Wolverine. Mr. Ostapovich has since
moved into senior leadership positions at Wolverine, most recently
serving as the Vice President of Operations. Jesse Douglas,
President and Chief Executive Officer of Wolverine, stated: "Mr.
Ostapovich has been instrumental in the growth of Wolverine and
direction of the company. Moving into the President and CEO role,
Mr. Ostapovich will continue to work with other members of
Wolverine's management team to further drive shareholder value,
through both accretive acquisitions and organic growth
opportunities."
About Wolverine
Wolverine is an industry-leading, diversified energy and
infrastructure service provider in western Canada and the
United States, providing a wide range of services including:
water management, production testing, oilfield/energy rentals, and
environmental services. Wolverine's original business roots and
operations began in 1952. Over the course of its history,
Wolverine has a strategy combining organic growth and strategic
acquisitions. Today, Wolverine is strongly positioned to
consolidate a highly-fragmented energy services and midstream
market in western Canada, and is
diligently focused on return on capital deployed, market
diversification, and maintaining best-in-class services throughout
the full life cycle of its diverse clients' projects.
About Blackheath
Blackheath currently has no ongoing operations and previously
operated as a junior mineral exploration company. Blackheath
is listed under the trading symbol "BHR" on the Exchange.
Blackheath was incorporated under the laws of British Columbia in May
2011 and was engaged in the exploration and development of
mineral properties in northern Portugal, primarily for tungsten and tin.
Blackheath currently has a royalty interest in the Borralha
tungsten project, which is subject to an option agreement with
another company.
Cautionary Statements
This news release contains forward-looking statements and/or
forward-looking information (collectively, "forward-looking
statements") within the meaning of applicable securities
laws. When used in this release, such words as "would",
"will", "anticipates", believes", "explores" and similar
expressions, as they relate to Blackheath, Wolverine, GIP or their
management, are intended to identify such forward-looking
statements. Such forward-looking statements reflect the
current views of Wolverine and Blackheath with respect to future
events, and are subject to certain risks, uncertainties and
assumptions. Many factors could cause Wolverine's or GIP's
actual results, performance or achievements to be materially
different from any expected future results, performance or
achievement that may be expressed or implied by such
forward-looking statements. In particular, this news release
contains or implies forward-looking statements pertaining to: the
completion of and steps required in connection with the
Transaction; the terms and completion of, and use of gross proceeds
from, the Concurrent Financing; the future business and prospects
of GIP and Wolverine; future potential acquisitions or
divestitures; Wolverine's corporate strategy; GIP's excepted
corporate strategy; and the fragmented position of the energy
service space. These forward-looking statements are subject to
numerous risks and uncertainties, including but not limited to: the
impact of general economic conditions in Canada and the
United States, including the ongoing COVID-19 pandemic;
industry conditions including changes in laws and regulations
including adoption of new environmental laws and regulations, and
changes in how they are interpreted and enforced, in Canada and the
United States; competition; lack of availability of
qualified personnel; obtaining required approvals of regulatory
authorities, in Canada and
the United States; volatility in
market prices for oil and gas; fluctuations in foreign exchange or
interest rates; environmental risks; changes in income tax laws or
changes in tax laws and incentive programs relating to the oil
industry; ability to access sufficient capital from internal and
external sources; and other factors, many of which are beyond the
control of Blackheath, Wolverine and GIP. These forward-looking
statements reflect material factors, expectations and
assumptions. Forward-looking statements included in this news
release should not be read as guarantees of future performance or
results. Such statements involve known and unknown risks,
uncertainties and other factors that may cause actual results,
performance or achievements to be materially different from those
implied by such forward-looking statements. Although the
forward-looking statements contained in this document are based
upon assumptions which management of Blackheath and Wolverine
believes to be reasonable, Blackheath and Wolverine cannot assure
investors that actual results will be consistent with these
forward-looking statements.
Readers are encouraged to review and carefully consider the
risk factors pertaining to Wolverine's business described in
Wolverine's latest annual Management's Discussion and Analysis,
which is accessible on Wolverine's SEDAR issuer profile at
www.sedar.com. The forward-looking statements contained in this
release are made as of the date of this release, and except as may
be expressly be required by law, Wolverine and Blackheath disclaim
any intent, obligation or undertaking to publicly release any
updates or revisions to any forward-looking statements contained
herein whether as a result of new information, future events or
results or otherwise, other than as required by applicable
securities laws.
Management of Blackheath and Wolverine has included the above
summary of assumptions and risks related to forward-looking
statements provided in this release in order to provide
shareholders with a more complete perspective on Wolverine's
current and future operations and such information may not be
appropriate for other purposes. Wolverine and GIP's actual results,
performance or achievement could differ materially from those
expressed in, or implied by, these forward-looking statements and,
accordingly, no assurance can be given that any of the events
anticipated by the forward-looking statements will transpire or
occur, or if any of them do, what benefits Wolverine and GIP will
derive therefrom.
This news release shall not constitute an offer to sell or
the solicitation of an offer to buy the securities in any
jurisdiction. The securities have not been and will not be
registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act") or any state securities
laws and may not be offered or sold in the United States except in certain
transactions exempt from the registration requirements of the U.S.
Securities Act and applicable state securities laws.
Completion of the Transaction is subject to a number of
conditions, including but not limited to, TSX Venture Exchange
acceptance and, if applicable, disinterested shareholder approval.
Where applicable, the Transaction cannot close until the required
shareholder approval is obtained. There can be no assurance that
the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the
management information circular or filing statement to be prepared
in connection with the Transaction, any information released or
received with respect to the Transaction may not be accurate or
complete and should not be relied upon. Trading in the securities
of Blackheath and Wolverine should be considered highly
speculative.
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the proposed Transaction and has neither approved nor
disapproved the contents of this news release.
SOURCE Wolverine Energy and Infrastructure Inc.