/NOT FOR DISTRIBUTION OR DISSEMINATION INTO
THE UNITED STATES OR THROUGH U.S.
NEWSWIRE SERVICES/
TORONTO, Nov. 17,
2022 /CNW/ - MCAN Mortgage Corporation d/b/a MCAN
Financial Group ("MCAN", the "Company" or "we") (TSX: MKP) today
announced that it is offering rights (the "Rights Offering") to
eligible holders of its common shares (the "Common Shares") of
record at the close of business on November
24, 2022 (the "Record Date").
Pursuant to the Rights Offering, each holder of Common Shares
will receive one right (a "Right") for each
Common Share held. Every 13 Rights will entitle the
holder to subscribe for one whole Common Share of the Company at a
price of $14.00 per Common Share
(the "Subscription Price").
MCAN expects to raise gross proceeds of
approximately $34.3 million from the Rights Offering and
intends to use all of the proceeds less offering expenses to fund
the Company's mortgage lending and investment business. The
Company expects the Rights Offering to close on or about
December 22, 2022.
"We are raising capital in order to take advantage of
immediately accretive opportunities that we see in our construction
and residential mortgage lending business and our investment
business," said Karen Weaver,
President and Chief Executive Officer. "Year to date growth in our
corporate assets to September 30,
2022 was 5%. The proceeds of this Rights Offering will
increase our asset capacity for further growth in line with our
risk appetite. Capital raised through rights offerings provide
existing shareholders with the opportunity to maintain or increase
their ownership in MCAN and participate in further growth of the
Company. Over the years, our shareholders have supported and
participated in our previous rights offerings, resulting in full
subscriptions. Our last rights offering in November 2021 was 1.4 times oversubscribed."
Directors and senior officers, collectively holding, directly
and indirectly, approximately 1.5 million Common Shares, have
indicated their intention to exercise some or all of their Rights,
subject to market conditions. Ian
Sutherland, a former director and major shareholder, who
continues to hold a significant position in the Company's Common
Shares, has indicated his intention to exercise some or all of his
Rights, subject to market conditions. As well, the KingSett
Canadian Real Estate Income Fund, a significant shareholder of the
Company, has indicated its intention to exercise some or all of its
Rights, subject to market conditions.
The Rights
will trade on the Toronto Stock Exchange
under the symbol MKP.RT.A commencing
on November 23, 2022 and will cease trading at
12:00 p.m. (Toronto time) on December 20, 2022. The ex-rights trading date for
the Common Shares on the Toronto Stock Exchange will be
November 23, 2022. This means that
Common Shares purchased on or following November 23, 2022 will not be entitled to
receive Rights under the Rights Offering. Rights are exercisable
until 5:00 p.m. (Toronto time) on December 20,
2022 (the "Expiry Time"),
after which time unexercised Rights will be
void and of no value. Shareholders must hold at least
13 Common Shares to exercise their Rights, as no fractional
Common Shares will be issued.
The Rights Offering includes an additional subscription
privilege under which eligible holders of Rights who fully exercise
their Rights will be entitled to subscribe for additional Common
Shares, if available, that are not otherwise subscribed for in the
Rights Offering.
There are currently 31,855,297 Common Shares outstanding.
Following completion of the Rights Offering, MCAN expects that
there will be approximately 34,305,704 Common Shares
outstanding.
The Rights Offering will be conducted only in the provinces and
territories of Canada (the
"Eligible Jurisdictions"). Accordingly, and subject to the detailed
provisions of a Rights Offering circular (the "Circular"), Rights
will not be delivered to, nor will they be exercisable by, persons
resident outside of the Eligible Jurisdictions. Rather, such Rights
may be sold on their behalf.
Details of the Rights Offering
will be set out in a Notice and Circular,
which will be available under the
Company's profile on SEDAR at www.sedar.com. The
Notice and accompanying direct registration system statement and
subscription form (the "Rights DRS Advice") will be mailed to each
eligible shareholder of MCAN as at the Record Date. To subscribe,
registered shareholders must forward the completed Rights DRS
Advice, together with the applicable funds, to the depositary and
subscription agent, Computershare Investor Services, Inc.,
prior to the Expiry Time. Shareholders who own their Common
Shares through an intermediary, such as a bank, trust company,
securities dealer or broker, will receive materials and
instructions from their intermediary.
The Rights and the Common Shares issuable upon exercise of the
Rights have not been, and will not be, registered under the United
States Securities Act of 1933, as amended, and accordingly, the
Rights and the Common Shares are not being publicly offered for
sale in the "United States" or to
"U.S. persons" (as such terms are defined in Regulation S under the
United States Securities Act of 1933, as amended). This press
release does not constitute an offer to sell or the solicitation of
an offer to buy the securities in any jurisdiction. There shall be
no sale of the securities in any jurisdiction in which an offer to
sell, a solicitation of an offer to buy or a sale would be
unlawful.
MCAN is a public company listed on the Toronto Stock Exchange
under the symbol MKP and is a reporting issuer in all provinces and
territories in Canada. MCAN also qualifies as a mortgage
investment corporation ("MIC") under the Income Tax Act
(Canada) (the "Tax
Act").
The Company's primary objective is to generate a reliable
stream of income by investing in a diversified portfolio of
Canadian mortgages, including residential, residential
construction, non-residential construction and commercial loans, as
well as other types of securities, loans and real estate
investments. MCAN employs leverage by issuing term deposits that
are eligible for Canada Deposit Insurance Corporation deposit
insurance that are sourced through a network of independent
financial agents. We manage our capital and asset balances based on
the regulations and limits of both the Tax Act and the Office of
the Superintendent of Financial Institutions Canada
("OSFI").
As a MIC, we are entitled to deduct the dividends that we pay
to shareholders from our taxable income. Regular dividends
are treated as interest income to shareholders for income tax
purposes. We are also able to pay capital gains dividends,
which would be treated as capital gains to shareholders for income
tax purposes. Dividends paid to foreign investors may be subject to
withholding taxes. To meet the MIC criteria, 67% of our
non-consolidated assets measured on a tax basis are required to be
held in cash or cash equivalents and residential mortgages.
Our MCAN Home division operates through MCAN's wholly owned
subsidiary, XMC Mortgage Corporation, which has legally changed its
name effective April 1, 2022, to MCAN
Home Mortgage Corporation.
A Caution About Forward-looking Information and
Statements
This news release contains "forward-looking information" within
the meaning of applicable securities laws. Forward-looking
information can be identified by words such as: "expect", "intend,"
"plan," "seek," "believe," "estimate," "future," "likely," "may,"
"should," "will" and similar forward-looking language. The expected
proceeds to be raised under the Rights Offering and the use
thereof, including MCAN's ability to deploy the proceeds on an
accretive basis, constitutes forward-looking information. The
forward-looking information contained in this news release is based
on a number of assumptions which we believe to be reasonable,
including assumptions relating to the completion of the Rights
Offering and the timing thereof, the amount of proceeds raised, the
investment opportunities that will be available to MCAN in its core
mortgage lending and investment business, and the expected use of
proceeds from the Rights Offering. Forward-looking information
entails various risks and uncertainties that could cause actual
results to differ materially from those expressed or implied in
such forward-looking information. Risks that could cause actual
results to differ materially from those expressed or implied in the
forward-looking information contained in this press release
include, but are not limited to, that shareholders will not
exercise all or any portion of the Rights, that the Company may not
be able to find a suitable use of the proceeds of the Rights
Offering on an accretive basis, the level of dilution that will be
experienced by shareholders who do not exercise all or a portion of
their Rights, failure to complete or a delay in the Rights
Offering for any other reason, the lack of a trading market for the
Rights developing and the trading price of the Common Shares
following completion of the Rights Offering. In addition, general
risks relating to capital markets, economic conditions, regulatory
changes, as well as the operations of our business may also cause
actual results to differ materially from those expressed or implied
in such forward-looking information. Forward-looking information is
not a guarantee of future performance, and management's assumptions
upon which such forward-looking information are based may prove to
be incorrect. Investors are cautioned not to place undue reliance
on any forward-looking information contained herein. The Company
disclaims any obligation to update or revise any forward-looking
information contained in this news release, whether as a result of
new information, future events or otherwise, except to the extent
required by law.
SOURCE MCAN Mortgage Corporation