TORONTO, April 23, 2018 (GLOBE NEWSWIRE) -- Marret Resource Corp. (TSX:MAR) (“Marret” or the “Company”) announces that, pursuant to a non-binding letter of intent (the “LOI”) with BC Partners Advisors L.P. (“BCP”), it proposes a transaction (the “Transaction”) whereby the Company will raise not less than C$25,000,000 through a “best efforts” brokered private placement (the “Financing”) of Subscription Receipts at a price of C$0.55 per Subscription Receipt (subject to adjustments as set out in the LOI, the “Financing Price”). As part of the Transaction and subject to the conditions more fully described below, including the receipt of shareholder approval and the closing of the Financing, the Company will terminate its existing management services agreement with Marret Asset Management Inc. (“MAMI”), and the board and senior management will be reconstituted. The investment strategy will be changed from a focus on natural resource lending to a broader lending-oriented credit platform that will initially make an investment in a diversified loan portfolio with an attractive yield managed by the principals of BC Partners Credit, a credit platform affiliated with BCP. BCP is a leading international investment firm with over C$26 billion of assets under management in private equity and private credit. The new strategy will be headed by Ted Goldthorpe, Managing Partner of BC Partners Credit, who was previously President of Apollo Investment Corporation, Chief Investment Officer at Apollo Investment Management, and head of its U.S. Opportunistic platform.
The proceeds from the Financing will be utilized primarily to acquire a diversified U.S. loan portfolio assembled by BC Partners Credit and for general corporate purposes. The BCP team plans to grow the loan portfolio both organically and strategically, while at the same time pursuing opportunities to add diversified fee streams on externally managed assets.
In connection with the Transaction, it is proposed that the Company will permit its existing shareholders to, at their option, either (i) retain their Common Shares; (ii) retract their Common Shares for C$0.53 in cash (the “Retraction”); or (iii) convert their Common Shares into warrants (the “Warrants”) at an exchange rate of approximately 7.8 Warrants per Common Share exchanged (subject to adjustments as set out in the LOI). Each Warrant will have a term of seven years from the date of issuance and an exercise price equal to 140% of the Financing Price. The number of Warrants to be issued will be limited to 20% of the sum of: (i) the Common Shares and (ii) the Warrants outstanding following completion of the Transaction.
The Company’s interest in Cline Mining Inc. (“Cline”), or proceeds from the sale thereof, will be distributed to existing shareholders of the Company prior to the completion of the Transaction.
The Transaction will be subject to Marret and BCP entering into a definitive agreement which will set out the structure for the Transaction and contain terms and conditions as are customary for transactions of this nature, including, but not limited to, legal and tax due diligence and structuring. In particular, the Transaction will be conditional on Marret disposing of its interest in all debt and equity securities of Cline and receipt of all desirable third party consents, including the conditional approval of the Toronto Stock Exchange.
It is expected that the Company will seek shareholder approval for the Transaction. Additional details about the Transaction, including the terms of the Financing, Retraction and Warrants will be contained in the information circular to be sent to holders of Common Shares in connection with the shareholder meeting to approve the Transaction and related matters. It is anticipated that the circular will be mailed in mid May for the meeting to be held at the end of June, 2018. The new management of the Company will be provided with an incentive arrangement to acquire Common Shares to be detailed in the information circular.
The Company and BCP have secured hard lock-ups from persons holding approximately 28.2% of the Common Shares who have agreed to vote in favour of, and otherwise support, the Transaction. The supporting shareholders include Anson Funds, the Company’s largest shareholder, and Barry Allan, of MAMI.
About Marret Resource Corp.
Marret Resource Corp. is currently focused on natural resource lending. The Company’s business is primarily directed to investing in public and private debt securities of and making term loans (including bridge and mezzanine debt) to issuers in a broad range of natural resource sectors, including energy, base and precious metals and other commodities, and issuers involved in exploration and development, and may also include financing other resource-related businesses and investing in public and private equity and quasi-equity securities. The Company seeks to generate income mainly from its lending activities, while taking advantage of additional upside through equity participation in the companies which it finances.
About BC Partners Advisors L.P. and BC Partners Credit
BC Partners is a leading international investment firm with over C$26 billion of assets under management in private equity and private credit. Established in 1986, BC Partners has played an active role in developing the European buyout market for three decades. Today, BC Partners executives operate across markets as an integrated team through the firm's offices in North America and Europe.
Since inception, BC Partners has completed 101 private equity investments in companies with a total enterprise value of €124 billion and is currently investing its tenth private equity fund. For more information, please visit www.bcpartners.com.
BC Partners Credit was launched in February 2017 and, using the deal sourcing and infrastructure made available from BC Partners, has pursued a debt strategy focused on identifying attractive credit opportunities in any market environment and across sectors.
For further information about Marret Resource Corp. and its ongoing business, please contact: Marret Investor Services 416.214.5800
This press release contains forward-looking statements and information within the meaning of applicable securities legislation. Forward-looking statements can be identified by the expressions "seeks", "expects", "believes", "estimates", "will", "target" and similar expressions. The forward-looking statements are not historical facts but reflect the current expectations of Marret Resource Corp. (the “Company”) regarding future results or events and are based on information currently available to them. Certain material factors and assumptions were applied in providing these forward-looking statements. The forward-looking events and circumstances discussed in this release include, but are not limited to, the terms of the Transaction, including the Option, the Financing, the Retraction and the Warrants, the timing and conditions of the Transaction, the likelihood of proceeding with the Transaction and the effect of the Transaction on the Company, the changes to the directors and management of Marret, the timing and nature of shareholder approval, the disposition of Cline Mining Inc. and the termination of the services agreement with Marret Asset Management Inc. All forward-looking statements in this press release are qualified by these cautionary statements. The Company believes that the expectations reflected in forward-looking statements are based upon reasonable assumptions; however, the Company can give no assurance that the actual results or developments will be realized. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed under "Risks Factors" in the prospectus or annual information form for the Company, and matters disclosed in the Company’s management information circular dated May 17, 2017. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances except as required by securities laws. These forward-looking statements are made as of the date of this press release.
This press release is not, and should not be construed as, an offer to sell or acquire any securities (including Common Shares, Subscription Receipts and Warrants) in any jurisdiction.