NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. WIRE SERVICES
Vancouver, British Columbia, September 11, 2017, Royalty North Partners Ltd. (TSXV:RNP) (“RNP” or the “Company”) is pleased to announce that further to its press release dated August 24, 2017, the Company has closed its transaction with Advance Wire Products Ltd. as well as the non-brokered private placement financing (the “Offering”) of unsecured convertible debentures (the “Debentures”) in the aggregate amount of C$6,000,000. The Debentures are convertible into common shares in the capital of the Company (the “Shares”) at a price of C$0.20 per Share at any time prior to the close of business on the earlier of the business day immediately preceding maturity and the business day immediately preceding the date fixed for redemption of the Debentures.
The Debentures and any Shares issued upon the conversion thereof are subject to a hold period and may not be traded until January 9, 2018, except as permitted by applicable securities legislation and the policies of the TSX Venture Exchange (the “TSXV”).
The Company will pay a commission to certain arm’s length finders in connection with the Offering. Each of Canaccord Genuity Corp. and DGW Capital Corp. will receive a 3% cash commission for Debentures placed by them.
The Company has used the proceeds of the Offering to fund a royalty transaction, as more particularly described below.
Transaction with Advance Wire Products
The Company has closed its loan transaction with a newly formed entity based in British Columbia (“AcquireCo”) which will acquire (the “Acquisition”) the outstanding shares of Advance Wire Products Ltd. (“Target” or the “Purchased Business”). Immediately upon completion of the Acquisition, AcquireCo and the Target will amalgamate, with the amalgamated entity (“AWP”) continuing to operate the Purchased Business.
Under the terms of the Agreement, RNP has loaned C$6,800,000 (the “Loan”) to AcquireCo. The Loan will be repaid by way of monthly loan payments equal to a minimum annual loan payment (the “Fixed Payment”) plus a percentage of the gross sales (the “Variable Payment”) of AWP. The Fixed Payment is C$408,000 and the initial Variable Payment will be 4.35% of gross sales. The Loan proceeds, along with the equity proceeds contributed by AcquireCo management and RNP (the “Equity Contribution”), will be used by AcquireCo for the purchase of the Target. RNP’s Equity Contribution over and above the Loan amount will be C$200,000. RNP funded the Loan and Equity Contribution through the proceeds of the Offering as well as a further draw-down of the Company’s senior credit facility.
Quotation on OTC Pink
The Company is also pleased to announce that the Shares are now quoted for trading on the OTC Pink Market in the United States under the ticker symbol “RYTTF”.
On behalf of the Company,
Chief Executive Officer and Director