This transaction (the 'Transaction') will constitute a backdoor listing of H2P (the 'Listing') under
The Transaction between Loop and H2P provides an unmatched platform to deliver hydrogen-enabled equipment across H2P and Loop's existing and prospective customer bases, in addition to leveraging Loop's supply of hydrogen fuel cells for industrial use cases led by customer demand.
Transaction Highlights
Provided that the Transaction is completed in accordance with the provisions of the Amalgamation Agreement, the following benefits are anticipated for the combined entity following the Amalgamation (the 'Combined Entity'):
Strong Incoming Team - board and operational expertise in industrial equipment integration and sales. Led by CEO
o
o
Proven
Operational Efficiencies - Significant cost and operational savings will be implemented immediately upon closing of the Transaction including downsizing Loop's leased real estate portfolio, selling non-core equipment and rationalizing operating expenses.
Concurrent Financing - concurrent with the Transaction, H2P plans to raise approximately
Additionally, H2P has agreed to provide Loop
'Hydrogen is the way, and customers are asking for solutions to replace their diesel-powered equipment. This transaction provides what the hydrogen sector in
Transaction Terms
The Transaction will be carried out by way of the Amalgamation under the Business Corporations Act (
Combined Entity Shares held by the principals of the Combined Entity may be held in escrow pursuant to the terms of an escrow agreement and will be released over a period of 18 months in accordance with the terms of such escrow agreement, all as prescribed by the TSX's Escrow Policy Statement.
Deal Protection Measures / Fiduciary Out
The Amalgamation Agreement contains customary deal-protection provisions including non-solicitation covenants, a fiduciary out, a right to match, and a break fee payable to H2P under certain circumstances.
The Company anticipates that it will file the Amalgamation Agreement on Loop's profile on SEDAR+ at www.sedar.ca on
Conditions to Completion of the Transaction
The Transaction is subject to receipt of approval of holders of common shares of Loop ('Loop Shareholders') at a special meeting of Loop Shareholders to be called in
Other conditions to completion of the Transaction include: (a) approval of the Amalgamation by H2P shareholders; (b) approval of the TSX to the Listing; (c) approval of the Minister responsible for Pacific Economic Development Canada; (d) there being no material adverse changes in respect of either Loop or H2P and, (e) other standard conditions of closing for a transaction of this nature. There can be no assurance that all of the necessary approvals will be obtained or that all conditions of closing will be satisfied in which event the Transaction may not proceed.
Concurrent Financing
H2P has represented the following to Loop with respect to the Concurrent Financing:
The Concurrent Financing will be in the form of a brokered private placement offering of Subscription Receipts to raise gross proceeds of approximately
Provided that the Escrow Release Conditions are satisfied or waived (where permitted), the Escrowed Proceeds will be released from escrow to or as directed by H2P and the Subscription Receipts shall be automatically converted into H2P Shares without payment of any additional consideration or further action on the part of the subscribers. These H2P Shares will then be immediately exchanged for Combined Entity Shares pursuant to the Amalgamation on the closing of the Transaction. In the event that the Escrow Release Conditions are not satisfied, the Escrowed Proceeds will be returned to the holders of Subscription Receipts and such Subscription Receipts will be cancelled.
The net proceeds of the Concurrent Financing will be used to fund ongoing operations, product and technology development for the Combined Entity and for working capital and general corporate ?purposes?.
The Concurrent Financing is to be conducted in all of the provinces and territories of
The Subscription Receipts to be issued in connection with the Concurrent Financing will be subject to an indefinite statutory hold period in
The Subscription Receipts to be offered in the Concurrent Financing have not been, and will not be, registered under the
Transaction Timeline
Pursuant to the Amalgamation Agreement and subject to satisfying all necessary conditions and receipt of all required approvals, the parties anticipate completion of the Transaction in
Complete details of the Transaction and disclosure in respect of H2P will be included in a management information circular of Loop that will be sent to Loop Shareholders in advance of the Loop Meeting.
Recommendations by the Boards of Directors and Fairness Opinion
After consultation with its financial and legal advisors, the board of directors of Loop unanimously approved the entering into of the Amalgamation Agreement.
Advisors and Counsel
Officer Changes at Loop
In conjunction with the signing of the Amalgamation,
About
Contact:
Email: paul.cataford@loopenergy.com
Interim CEO
Email: scott.mason@h2portable.com
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking information within the meaning of applicable securities legislation ('forward-looking statements'), which reflect management's current expectations and projections regarding future events including statements regarding the Transaction and the benefits thereof, including the financial and operational benefits and attributes of the Combined Entity, the timing for the Loop Meeting, the pro forma ownership of the Combined Entity, the Concurrent Financing, and timing to close the Concurrent Financing and Transaction.
Investors are cautioned that forward-looking statements are not based on historical facts, but instead reflect the Company's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, including assumptions regarding the Company's and H2P's ability to close the Transaction and the Concurrent Financing. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed thereon, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company.
Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following: the parties' ability to consummate the Transaction and H2P's ability to complete the Concurrent Financing; the ability to receive, in a timely manner and on satisfactory terms, all necessary approvals, including TSX approval, and requisite shareholder and third party approvals; the ability of the parties to satisfy, in a timely manner, all other conditions to the closing of the Transaction; the potential impact of the announcement or consummation of the Transaction on relationships, including with regulatory bodies, stock exchanges, lenders, service providers, employees and competitors; the diversion of management time on the Transaction; assumptions concerning the Transaction and the operations and capital expenditure plans of the combined entity following completion of the Transaction; credit, liquidity and additional financing risks for the Company; the Company's actual financial results and ability to manage its cash resources; changes in general economic, business and political conditions, including challenging global financial conditions or otherwise; changes in applicable laws and regulations both locally and in foreign jurisdictions; compliance with extensive government regulation; the risks and uncertainties associated with foreign markets and the other risk factors more fully described under the heading 'Risk Factors' in the each of Company's most recent annual information form and management's discussion and analysis, each of which is available on the Company's SEDAR+ profile at www.sedarplus.ca.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended and such changes could be material. The Company does not intend, and do not assume any obligation, to update the forward-looking statements except as otherwise required by applicable law.
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