Following Shareholder Approval, NMG Set to Close Aggregate US$37.5M Private Placements by Mitsui and Pallinghurst
Nouveau Monde Graphite Inc. (NYSE:NMG, TSXV: NOU) secured shareholder approval for private placements totaling US$37.5M by Mitsui and Pallinghurst. The placements involve surrendering and canceling convertible notes dated November 8, 2022, with closing set for May 2, 2024. Mitsui's US$25M and Pallinghurst's US$12.5M private placements received disinterested shareholder approval, adhering to Regulation 61-101 and Policy 5.9. The company engaged Fort Capital Partners for a valuation analysis, determining the placements as fair. Shareholders voted in favor of all resolutions, including creating new control persons for Mitsui, General Motors , and Panasonic Holdings Mitsui and Pallinghurst will exchange their convertible notes for common shares and warrants, subject to TSX Venture Exchange approval.
Securing US$37.5M in private placements indicates investor confidence in NMG's future prospects.
Approval from disinterested shareholders and engagement of Fort Capital Partners demonstrate transparency and adherence to regulations.
The creation of new control persons for Mitsui, General Motors , and Panasonic Holdings reflects strategic partnerships and potential growth opportunities.
The surrender and cancellation of convertible notes may impact NMG's balance sheet and future financing options.
Restrictions on Mitsui's holdings to 20% of issued common shares for three years could limit the company's ability to attract additional investment.
Closing the private placements may lead to dilution for existing shareholders, potentially impacting stock performance.
Insights
The private placements of Nouveau Monde Graphite Inc. (NMG) represent a significant strategic funding milestone, demonstrating confidence from key investors Mitsui and Pallinghurst. From a financial perspective, the transaction bolsters NMG's capital structure by converting debt into equity, reducing the company's leverage and interest obligations. It also potentially dilutes existing shareholders but is offset by the benefits of a strengthened balance sheet and the endorsement of high-profile investors.
Key to understanding this financial move is the valuation and fairness opinion provided by Fort Capital Partners, ensuring that the transaction is equitable to minority shareholders. The equity conversion and investor rights agreements, coupled with Mitsui's lock-up period and standstill limitation, indicate a long-term commitment from these investors, hinting at stability and a strategic direction that may be favored by the market.
The overwhelming shareholder approval of the Related Party Private Placements highlights the transparent corporate governance practices of NMG. Ensuring adherence to Regulation 61-101 and Policy 5.9 is important in maintaining investor trust, especially when transactions involve related parties. The engagement of Fort Capital Partners to provide an independent valuation and fairness opinion further solidifies this trust.
Looking ahead, Mitsui's board nomination and anti-dilution rights and the stipulated standstill agreement, could reshape NMG's corporate governance landscape. These developments suggest Mitsui's influence on NMG's board may increase, possibly affecting company policy and strategy. While this can introduce new expertise and direction, it also raises questions about maintaining a balance of power within the boardroom.
+ Approval by NMG shareholders of private placements for an aggregate amount of
+ Private placements scheduled to close on May 2, 2024, with the surrender and cancellation of Mitsui and Pallinghurst’s convertible notes dated November 8, 2022.
Mitsui had committed to a private placement of
As per Regulation 61-101, the Company’s disinterested directors engaged Fort Capital Partners British Columbia (“Fort Capital Partners”) to carry out a valuation analysis and fairness opinion (the “Valuation and Fairness Opinion”). The Valuation and Fairness Opinion concluded that the Related Party Private Placements are fair, from a financial point of view, to Shareholders (other than Mitsui and Pallinghurst).
Matters Voted at the Special Meeting
Shareholders adopted all resolutions submitted for their approval, including the Related Party Private Placements. The complete voting results for each item of business are as follows:
RESOLUTIONS |
IN FAVOR |
WITHHELD |
||
Votes |
% |
Votes |
% |
|
Mitsui Private Placement |
43,333,378 |
|
278,086 |
|
Pallinghurst Private Placement |
31,165,461 |
|
281,398 |
|
Creation of a new control person, being Mitsui |
43,422,952 |
|
188,512 |
|
Creation of a new control person, being General Motors LLC |
30,951,993 |
|
159,471 |
|
Creation of a new control person, being Panasonic Holdings Corporation |
43,488,962 |
|
122,502 |
|
Closing of the Related Party Private Placements
NMG, Mitsui and Pallinghurst are scheduled to close the Related Party Private Placements on May 2, 2024, subject to the final acceptance of the TSX Venture Exchange.
Mitsui is exchanging its convertible note, dated November 8, 2022, as amended and restated on April 11, 2023, for 12,500,000 Common Shares in the capital of NMG (the “Common Shares”) and 12,500,000 Common Share purchase warrants on the same pricing and other terms as the previously announced
Pallinghurst is exchanging its convertible note, dated November 8, 2022, as amended and restated on April 11, 2023, for 6,250,000 Common Shares and 6,250,000 Common Share purchase warrants on the same pricing and other terms as the Tranche 1 Investment with the Anchor Customers. NMG will enter into a registration rights agreement with Pallinghurst at the closing of their investment.
Concurrently with the redemption, surrender and cancellation of Mitsui’s and Pallinghurst’s convertible notes, 1,579,043 common shares that have been reserved for issuance will be issued as fully paid and non-assessable common shares.
About Nouveau Monde Graphite
Nouveau Monde Graphite is an integrated company developing responsible mining and advanced manufacturing operations to supply the global economy with carbon-neutral active anode material to power EV and renewable energy storage systems. The Company is developing a fully integrated ore-to-battery-material source of graphite-based active anode material in
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Cautionary Note
All statements, other than statements of historical fact, contained in this press release including, but not limited to those describing the closing of the transactions contemplated with Pallinghurst and Mitsui, receipt of any regulatory or other approvals in respect of the initiatives described herein, the anticipated benefits of the initiatives described herein, the use of proceeds of the Related Party Private Placements, the anticipated timing and various steps to be completed in connection with the Related Party Private Placements, including closing, the intended supply of active anode material to GM and Panasonic Energy Co., Ltd., a wholly owned subsidiary of Panasonic and expected volume of active anode material per year, the Company’s planned all-electric operations, the Company’s initiatives and commitments described in this press release, including those related to ESG, the positive impact of the foregoing on project economics and shareholder value, the Company’s relationship with its stakeholders, including First Nations, suppliers, contractors and employees, market and industry trends, the general business and operational outlook of the Company, the intended results of the initiatives described in this press release and those statements which are discussed under the “About Nouveau Monde” paragraph and elsewhere in the press release which essentially describe the Company’s outlook and objectives, constitute “forward-looking information” or “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of Canadian and
Forward-looking statements are subject to known or unknown risks and uncertainties that may cause actual results to differ materially from those anticipated or implied in the forward-looking statements. Risk factors that could cause actual results or events to differ materially from current expectations include, among others, those risks, delays in the scheduled delivery times of the equipment, the ability of the Company to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the availability of financing or financing on favorable terms for the Company, the dependence on commodity prices, the impact of inflation on costs, the risks of obtaining the necessary permits, the operating performance of the Company’s assets and businesses, competitive factors in the graphite mining and production industry, changes in laws and regulations affecting the Company’s businesses, including the changes in China’s policy regarding restrictions on Chinese graphite materials exportations, political and social acceptability risk, environmental regulation risk, currency and exchange rate risk, technological developments, and general economic conditions, as well as earnings, capital expenditure, cash flow and capital structure risks and general business risks. A further description of risks and uncertainties can be found in NMG’s Annual Information Form dated March 27, 2024, including in the section thereof captioned “Risk Factors”, which is available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. Unpredictable or unknown factors not discussed in this Cautionary Note could also have material adverse effects on forward-looking statements.
Many of these uncertainties and contingencies can directly or indirectly affect, and could cause, actual results to differ materially from those expressed or implied in any forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future. The Company disclaims any intention or obligation to update or revise any forward-looking statements or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.
The market and industry data contained in this press release is based upon information from independent industry publications, market research, analyst reports and surveys and other publicly available sources. Although the Company believes these sources to be generally reliable, market and industry data is subject to interpretation and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data-gathering process and other limitations and uncertainties inherent in any survey. The Company has not independently verified any of the data from third-party sources referred to in this press release and accordingly, the accuracy and completeness of such data is not guaranteed.
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.
Further information regarding the Company is available in the SEDAR+ database (www.sedarplus.ca), and for
View source version on businesswire.com: https://www.businesswire.com/news/home/20240501858549/en/
MEDIA
Julie Paquet
VP Communications and ESG Strategy
+1-450-757-8905, ext. 140
jpaquet@nmg.com
INVESTORS
Marc Jasmin
Director, Investor Relations
+1-450-757-8905, ext. 993
mjasmin@nmg.com
Source: Nouveau Monde Graphite Inc.
FAQ
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What is the significance of the creation of new control persons for Mitsui, General Motors , and Panasonic Holdings ?
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