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TSXV: DUG │OTCQX: DSTFF
TORONTO, Sept. 12, 2018 /CNW/ - Distinct
Infrastructure Group Inc. ("DIG" or the "Company") today announced
the closing of a $10 million private
placement offering (the "Offering") of unsecured subordinated
convertible debenture units (the "Debenture Units"), and an amended
banking agreement with the Royal Bank of Canada ("RBC") including revised pricing and
financial covenants.
"This mezzanine financing is a very positive step forward for
DIG. It provides additional financial flexibility to the Company,
better positioning us to take advantage of the significant
opportunities in our core markets and to continue building market
share," said Joe Lanni, DIG's
Co-Chief Executive Officer. "Proceeds are expected to be used for
reduction of senior debt, working capital, acquisitions and for
general corporate purposes."
Each Debenture Unit consists of $1,000 principal amount (the "Principal Amount")
of unsecured subordinated convertible debt (the "Debentures") and
225 common share purchase warrants (the "Warrants"). Each Warrant
entitles the holder to acquire one common share of the Company at
an exercise price of $0.70 at any
time up to September 12, 2020
(subject to adjustment in certain customary events).
The Debentures will mature on September
12, 2020 (the "Maturity Date"), at which time any
outstanding Principal Amount and any accrued and unpaid interest
will be due. Subject to certain conditions, the Company may redeem
all or any portion of the outstanding Debentures prior to the
Maturity Date (the "Redemption Date"). The Debentures carry
interest of 12.5% per annum for the first six months and 15% per
annum thereafter until paid in full. Interest shall be calculated
and accrue monthly in arrears and shall be paid on the earlier of
the Redemption Date or Maturity Date. In addition, a commitment fee
of 1% of the initial Principal Amount was paid at closing to
subscribers of the Debenture Units.
The Debentures are convertible at the option of the holders into
Common Shares at a price of $0.70 per
Common Share, up to a maximum of $500
for each $1,000 of Principal Amount
of Debentures.
If the Debentures are not redeemed by the Company on or before
March 12, 2019, the Company will
issue 50 additional Warrants for each $1,000 of Principal Amount of Debentures
outstanding (the "Penalty Warrants"). Each Penalty Warrant entitles
the holder to acquire one Common Share, for an exercise price equal
to the 10 day Volume-Weighted Average Price on the date of
issuance, at any time up to 18 months following the issuance date
of the Penalty Warrants (subject to adjustment in certain customary
events). The Offering is subject to TSX Venture Exchange ("TSXV")
final acceptance of requisite regulatory filings.
AltaCorp Capital Inc. acted as sole Agent and exclusive
financial advisor for the transaction.
The updated banking agreement revises the Company's Revolving
Loan and Term Loan with RBC dated November
21, 2017. It includes a $35
million Senior Secured Revolving Facility (the "Revolver"),
a $20 million Senior Secured Term
Loan Facility (the "Term Loan") and a $10
million accordion option at RBC's discretion. The Revolver
reverts back to $30 million by
March 31, 2019. In addition, RBC has
agreed to amend certain financial covenants for the quarters ending
June 30, 2018, September 30, 2018, December 31 2018, and March 31, 2019.
The Revolver matures on May 26,
2020, and the Term Loan matures on May 26, 2022 (as per the November 21, 2017 agreement). The interest rate
for the Revolver and Term Loan remain unchanged.
"This updated agreement illustrates the cooperative relationship
we have with our lender as we work toward the common goal of
continuing the Company's growth story and increasing shareholder
value." said William Nurnberger,
Interim Chief Financial Officer.
The securities subject to the Offering, including the
securities underlying the Debenture Units, have not been and will
not be registered under the U.S. Securities Act of 1933, as
amended, (the "U.S. Securities Act") and may not be offered or sold
in the United States absent
registration under or an applicable exemption from the registration
requirements of the U.S. Securities Act. This press release does
not constitute an offer to sell or the solicitation of an offer to
buy the securities herein described, and shall not constitute an
offer, solicitation or sale in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of that
jurisdiction.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
About Distinct Infrastructure Group:
Distinct Infrastructure Group Inc. is a 100% Canadian-owned and
operated firm providing design, engineering, construction and
maintenance services to telecommunication firms, utilities and
governments. Our service offerings include the design, engineering
and delivery of underground and aerial construction, as well as
inventory management and technical services.
Our mission is to be responsive to the current and future needs
of our clients by delivering safe, turnkey solutions that
positively impact the communities in which we live and work. We
work wherever our clients need us, from our bases in Toronto and Winnipeg.
Forward Looking Statements
This news release contains "forward-looking statements" within
the meaning of the United States Private Securities Litigation
Reform Act of 1995 and applicable Canadian securities legislation.
Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as "plans",
"anticipated", "expects" or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases or state that certain actions,
events or results "may", "could", "would", "might" or "will be
taken", "occur" or "be achieved". Inspiration is subject to
significant risks and uncertainties which may cause the actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by the forward looking statements contained in this
release. Inspiration cannot assure investors that actual results
will be consistent with these forward looking statements and
Inspiration assumes no obligation to update or revise the forward
looking statements contained in this release to reflect actual
events or new circumstances.
SOURCE Distinct Infrastructure Group Inc.