GFL Environmental Inc. Announces Issuance of 16 million Subordinate Voting Shares on Conversion of Series A Preferred Shares

Rhea-AI Summary

GFL Environmental Inc. (NYSE: GFL) (TSX: GFL) has announced that HPS Investment Partners, has converted 14,565,543 Series A Preferred Shares into 16,000,000 subordinate voting shares. The converted shares were subsequently sold in a block trade at US$39.60 per share. This conversion and sale represent a significant change in GFL's capital structure and ownership composition. The transaction may impact the company's stock price and voting power distribution among shareholders.

Positive

• Conversion of preferred shares to subordinate voting shares simplifies GFL's capital structure
• Block trade sale at US$39.60 per share indicates market confidence in GFL's stock

Negative

• Issuance of 16 million new subordinate voting shares may lead to dilution for existing shareholders
• Large block sale by a major investor could potentially put downward pressure on the stock price

Insights

Financial Analyst

The conversion of 14.6 million Series A Preferred Shares into 16 million subordinate voting shares is a significant development for GFL Environmental. This move dilutes existing shareholders' ownership but improves the company's capital structure by reducing preferred equity. The sale price of US$39.60 per share indicates strong market demand, potentially reflecting investor confidence in GFL's prospects.

The transaction's total value of approximately US$633.6 million provides substantial liquidity for HPS, the selling shareholder. For GFL, this conversion simplifies its share structure and may enhance trading liquidity of its common stock. However, the increased float could put short-term pressure on the stock price. Investors should monitor how this change affects GFL's financial metrics, particularly earnings per share and return on equity.

Corporate Governance Expert

This transaction marks a significant shift in GFL Environmental's ownership structure. The conversion of preferred shares to common stock typically signals confidence in a company's long-term prospects. However, the immediate sale by HPS raises questions about their ongoing commitment to GFL.

From a governance perspective, this move could potentially alter the balance of power among shareholders. With 16 million new subordinate voting shares entering the market, it's important to assess how this might impact voting rights and control dynamics. Investors should pay close attention to any changes in board composition or strategic direction that may follow this substantial ownership change.

VAUGHAN, ON, Sept. 12, 2024 /PRNewswire/ - GFL Environmental Inc. (NYSE: GFL) (TSX: GFL) ("GFL" or the "Company") today announced that HPS Investment Partners, LLC ("HPS"), on behalf of the holders of the Company's Series A perpetual convertible preferred shares ("Series A Preferred Shares"), has provided notice of conversion of 14,565,543 Series A Preferred Shares for 16,000,000 subordinate voting shares. The subordinate voting shares issued on conversion of the Series A Preferred Shares were sold by funds managed by HPS in a block trade, at a price of US$39.60 per share.

About GFL

GFL, headquartered in Vaughan, Ontario, is the fourth largest diversified environmental services company in North America, providing a comprehensive line of solid waste management, liquid waste management and soil remediation services through its platform of facilities throughout Canada and in more than half of the U.S. states. Across its organization, GFL has a workforce of more than 20,000 employees.

Forward-Looking Statements

This press release includes certain "forward-looking statements" within the meaning of applicable securities laws. In some cases, but not necessarily in all cases, forward-looking statements can be identified by the use of forward looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking statements. Forward-looking statements are not historical facts, nor guarantees or assurances of future performance but instead represent management's current beliefs, expectations, estimates and projections regarding future events and operating performance. Forward-looking statements are necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by GFL as of the date of this release, are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking statements include, but are not limited to, the factors described in the "Risk Factors" section of GFL's annual information form for the 2023 fiscal year filed on Form 40-F and GFL's other periodic filings with the U.S. Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada. These factors are not intended to represent a complete list of the factors that could affect GFL. However, such risk factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. You should not place undue reliance on forward-looking statements, which speak only as of the date of this release. GFL undertakes no obligation to publicly update any forward-looking statement, except as required by applicable securities laws.

For more information:
Patrick Dovigi
+1 905-326-0101
pdovigi@gflenv.com 

 

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SOURCE GFL Environmental Inc.

FAQ

How many Series A Preferred Shares of GFL Environmental were converted?

14,565,543 Series A Preferred Shares of GFL Environmental were converted.

How many subordinate voting shares were issued by GFL Environmental in the conversion?

GFL Environmental issued 16,000,000 subordinate voting shares in the conversion.

At what price were the converted GFL Environmental shares sold?

The converted GFL Environmental shares were sold at a price of US$39.60 per share.

Who initiated the conversion of GFL Environmental's Series A Preferred Shares?

HPS Investment Partners, initiated the conversion on behalf of the holders of GFL Environmental's Series A Preferred Shares.