Wildpack announces restructuring project

VANCOUVER, BC / ACCESSWIRE / July 5, 2024 / Wildpack Beverages Inc. (TSXV:CANS)(OTC ROSE:WLDPF) (“Wild Pack” or the “Business“) a leading contract packager of canned products in the mid-market, announces that the Company is proposing to enter into a restructuring transaction (the “Bond restructuring operation“) regarding its outstanding 8.00% convertible unsecured subordinated debentures in an aggregate principal amount of $45,007,000 (the “Obligations“), which were issued pursuant to a convertible debenture trust indenture between the Company and Computershare Trust Company of Canada (the “Basic Trust Deed“) dated June 30, 2021, which provides for the issuance of one or more series of unsecured subordinated notes of the Company, together with supplemental indentures dated August 27, 2021, November 23, 2021 and March 31, 2022 (collectively, the “Indenture“).

The bond restructuring transaction will include the following transactions:

1. the Company will repurchase or coordinate the purchase of bonds in a principal amount of $20,000,000 (the “Bonds redeemed“) of three holders representing the majority owners of the debentures (“Sellers“), in exchange for cash consideration of $2,000,000 (the “Bond buyback“);

2. the Company will delist the Bonds (the “Removal from the list“) of the TSX Venture Exchange (the “TSX Venture Exchange“); And

3. pursuant to Section 12.11(l) of the Trust Indenture, the Company will arrange for the remaining outstanding Debentures to be exchanged for common shares in the capital of the Company (“Ordinary actions“) at an exchange price of $0.10 per common share (the “Actions for debt settlement“). It is proposed that the Debt Settlement by Shares will be completed after the record date of the Rights Offering and, accordingly, the Company does not intend to issue any rights to holders of Notes in respect of the Common Shares issued pursuant to the Debt Settlement by Shares.

The Repurchased Debentures will either be repurchased for cancellation or assigned and transferred to the Lenders under the Other Sources Loan (as defined below) who elect to accept a pro rata share of the Repurchased Debentures in lieu of an interest-bearing loan (as described below).

Once the settlement of the debt by shares is completed, the Company will no longer have any bonds outstanding.

The common shares issued in connection with the equity debt settlement are expected to be subject to a four-month and one-day hold period under applicable securities laws.

Simultaneous transactions

In parallel with the completion of the bond restructuring transaction, the Company intends to enter into the following transactions:

1. The Company proposes to seek approval for an amendment to its term loan from Sandton Capital Solutions Master Fund V, LP, a subsidiary of Sandton Capital Partners, LP (the “Term Loan”).Sandton loan“) involving the following major changes (collectively, the “Amended Sandton loan“):

   1. increase the size of the Sandton Loan Facility by USD 4,000,000;

   2. amend the conversion terms of the Sandton Loan such that a portion of the increased facility under the amended Sandton Loan in the amount of US$3,500,000 will be convertible to up to 70% of the Company’s US operating subsidiary, and the US$25,000,000 portion of the Sandton Loan, formerly convertible, will no longer be convertible and will instead be converted into term debt; and

   3. extending the term of the Sandton Loan until 23 May 2027 (for the USD 25,000,000 tranche) and until 10 October 2026 (for the USD 5,000,000 tranche);

   4. increase the interest rate on the Sandton loan to 15% per annum;

   5. waiver of restrictive clauses until January 1, 2025; and

   6. interest paid in kind will be extended until January 1, 2025.

2. The Company proposes to raise $1,325,000 of debt from other sources (the “Other sources of loan“), lenders of these loans from other sources having the possibility of:

   1. grant to the Company an interest-bearing loan, bearing simple interest at 15% per annum (increasing to 20% per annum after 120 days from the initial advance date), which loan may be repaid in advance without penalty and secured by the redeemed debentures until the redeemed debentures are cancelled; or

   2. accept their pro rata share of the redeemed debentures; and

3. The Company proposes to conduct a rights offering pursuant to which it will offer its shareholders rights to subscribe for an aggregate of approximately 240 million common shares at a price of $0.0148 per common share for gross proceeds to the Company of $3,550,000, to be made by way of a prospectus offering (the “Offering”).Offer of rights“).

For further details regarding the Sandton Loan, please refer to the Company’s press releases dated 19 April 2023, 11 October 2023 and 1 December 2023.

Funding sources

The repurchase of the bonds will be financed by the following sources:

1. a portion of the indebtedness under the amended Sandton loan in the amount of USD 500,000, with the remainder of the indebtedness under the amended Sandton loan being used to finance working capital requirements; and

2. indebtedness under the loan from other sources.

A portion of the proceeds from the rights offering will be used to repay indebtedness incurred under the amended Sandton loan and the loan from other sources.

The Bond Restructuring Transaction is not conditional on the completion of the Rights Offering. In the event that the Rights Offering is not completed, MMCAP International Inc. SPC will become a Control Person (as defined below) of the Company following the Share Exchange by virtue of owning more than 20% of the Company’s issued and outstanding common shares.

A copy of the Trust Deed and the Sandton Loan evidence are filed under the Company’s profile on SEDAR+ at www.sedarplus.ca.

Closing of the Debenture Restructuring Transaction is expected to occur as soon as practicable following receipt of all required approvals. Closing of the Debenture Restructuring Transaction is subject to customary closing conditions, approval by the TSXV and receipt of necessary approvals from the Company’s shareholders and debentureholders.

By: “Mitch Barnard”

Mitch Barnard
Chief Executive Officer and Director

For further information please contact us at:
(protected email)

Or

Elie Clare
Vice President, Investor Relations
(protected email)

Advisors

Fasken Martineau DuMoulin SENCRL, srl is the legal advisor to Wildpack Beverage Inc.

Visit our investor website at:

https://investor.wildpackbev.com

About Wildpack

Wildpack Beverage provides beverage manufacturing and packaging services to the mid-market by providing sustainable aluminum can filling, decorating, packaging, brokerage, sleeve/label printing and logistics services to brands across the United States. Wildpack Beverage operates indirectly through its wholly-owned subsidiaries and from five facilities in Baltimore, Maryland; Grand Rapids, Michigan; Atlanta, Georgia; Sacramento, California; and Las Vegas, Nevada, with a focus on digital innovation and green ready-to-drink packaging. Wildpack Beverage began trading on the TSX Venture Exchange under the symbol “CANS” on May 19, 2021.

Caution Regarding Forward-Looking Information

This press release may contain “forward-looking statements” within the meaning of applicable Canadian securities laws, including, but not limited to, statements regarding the Debenture Restructuring Transaction and related transactions to be completed in connection therewith. Forward-looking statements are based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive risks, including, but not limited to, risks related to obtaining regulatory, shareholder and debentureholder approvals of the Debenture Restructuring Transaction and related transactions to be completed in connection therewith. These statements can generally be identified by the use of forward-looking terminology such as “may,” “should,” “will,” “could,” “intend,” “estimate,” “plan,” “anticipate,” “expect,” “believe,” or “continue,” or the negative of these terms or similar variations. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual future results, performance or achievements to be materially different from any estimated future results, performance or achievements expressed or implied by such forward-looking statements and forward-looking statements are not guarantees of future performance. Forward-looking statements expressed or implied by Wildpack are subject to a number of risks, uncertainties and conditions, many of which are beyond Wildpack’s control, and undue reliance should not be placed on such statements. Although Wildpack has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Forward-looking statements are entirely subject to risks and uncertainties inherent in Wildpack’s business, including the fact that Wildpack’s assumptions in developing the forward-looking statements may prove incorrect and that Wildpack will not obtain regulatory, shareholder or bondholder approval for the bond restructuring transaction and related transactions to be completed in connection therewith. Except as required by securities laws, Wildpack undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: Wildpack Beverages Inc.