AFCC Automotive Finco Corp

Automotive Finco Corp. (TSX-V: AFCC) (“AFCC” or the “Company”) is announcing today that, further to its press release of December 18, 2020, it intends to make a substantial issuer bid (the “Offer”) pursuant to which AFCC will offer to repurchase for cancellation up to $12,375,000 of its outstanding common shares (the “Shares”) from shareholders for cash.  AFCC also announces that at a shareholders’ meeting held on January 29, 2021, shareholders approved a special resolution reducing the stated capital of the Company. 

The Offer will proceed by way of a modified “Dutch auction”, which will allow shareholders to select the price, within the specified range, at which each shareholder is willing to sell all or a portion of the Shares that such shareholder owns. Shareholders who wish to participate in the Offer will be able to do so through (i) auction tenders in which they will specify the number of Shares being tendered at a price of not less than $1.60 per Share and not more than $1.65 per Share in increments of $0.01 per Share or (ii) purchase price tenders in which they will not specify a price per Share, but will rather agree to have a specified number of Shares purchased at the purchase price to be determined under the Offer. When the Offer expires, AFCC will select the purchase price of the tendered Shares which will be the lowest tendered price within the range of prices, enabling the Company to purchase up to the maximum number of Shares validly tendered to the Offer. All Shares tendered at or below the selected price level will be bought at the purchase price. If the aggregate cost to purchase the tendered Shares exceeds $12,375,000, the Company will accept such Shares on a pro-rata basis after giving effect to “odd lot” tenders, which will not be subject to pro-ration. All Shares tendered at prices higher than the final purchase price will be returned to shareholders.

The Offer will not be conditional on any minimum number of Shares being tendered to the Offer, but will be subject to other conditions customary for a transaction of this nature. The Offer will be for up to a maximum of 7,734,375 Shares, or approximately 33.45% of AFCC’s 23,123,773 currently issued and outstanding Shares, assuming full participation and a purchase price equal to the minimum purchase price of $1.60 per Share. The Company intends to fund the Offer from available cash on hand.

It is anticipated that the formal offer to purchase, issuer bid circular and other related documents (the “Offer Documents”) containing the terms and conditions of the Offer and instructions for tendering Shares will be mailed to shareholders and filed with the applicable securities regulators and available on SEDAR under the Company's profile at www.sedar.com within the week. Further information concerning the terms and conditions of the Offer will be contained in the Offer Documents. The Offer will remain open for acceptance for at least 35 days after the date of commencement, unless withdrawn or extended by the Company in accordance with applicable securities laws.

AFCC’s board of directors has authorized the making of the Offer. The directors and officers of AFCC have advised that they will not tender any of their Shares to the Offer. AA Capital LP, the general partner of which is controlled by Mr. Kuldeep Billan, the Chief Executive Officer of the Company, has also indicated to the Company that it does not intend to tender any of its Shares to the Offer.

This press release is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell Shares. The solicitation and the offer to buy Shares are only being made pursuant to the Offer Documents. None of the Company, its board of directors, Computershare Investor Services Inc., the depositary for the Offer, or Kingsdale Advisors, information agent for the Offer, makes any recommendation to shareholders as to whether to deposit or refrain from depositing any or all of such shareholders’ Shares to the Offer. Shareholders are strongly urged to consult their own financial, tax, legal, and other professional advisors, and to make their own decision whether to tender or refrain from tendering their Shares to the Offer and, if so, how many Shares to tender.

Additionally, any questions can be directed to Kingsdale Advisors, the information agent for the Offer, by telephone at 1-888-518-6554 (toll free in North America), or 416-867-2272 (collect calls outside North America), or by email at contactus@kingsdaleadvisors.com.

Further information concerning the factors considered by the Board of Directors, along with the terms and conditions of the Offer, will be contained in the Offer Documents that will be mailed to shareholders and available on SEDAR when the Offer is formally launched. 

Kuldeep Billan, Email:  kbillan@autofincocorp.com

About Automotive Finco Corp.

Automotive Finco Corp ("AFCC") is a high growth specialty finance company focused exclusively on the auto retail sector. Through its investment in Automotive Finance LP, the Company has exposure to a business providing long term, debt based acquisition financing to auto dealerships across the globe, with an initial focus on Canada. In addition to its interest in Automotive Finance LP, AFCC may also pursue other direct investments and financing opportunities across the auto retail sector. For further information please refer to the Company's website: www.autofincocorp.com

Neither 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.

This news release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws. All statements, other than statements of historical fact, constitute forward-looking statements or forward-looking information. Such forward-looking information and statements are frequently identified by words such as  “may”, “will”, “should”, “anticipate”, “plan”, “expect”, “believe”, “estimate”, “intend” and similar terminology, and reflect assumptions, estimates, opinions and analysis made by management in light of its experience, current conditions, expectations of future developments and other factors which it believes to be reasonable and relevant. In particular and without limitation, this news release contains forward-looking statements relating to: the pricing, timing, completion and other terms of the Offer; AFCC’s expected source of funds for the Offer; and the intention of the directors and officers of the Company and AA Capital LP not to tender their Shares to the Offer.

Forward-looking information and statements involve known and unknown risks and uncertainties that may cause actual results, performance and achievements to differ materially from those expressed or implied by the forward-looking information and statements and, accordingly, undue reliance should not be placed thereon. Such risks and uncertainties include, but are not limited to: the Offer not occurring as expected or the size, timing and terms of the Offer, the anticipated mailing date of the Offer Documents and commencement date of the Offer, including the failure of any condition to the Offer to be met; AFCC’s inability to finance the Offer in the manner it intends; the extent to which shareholders elect to tender their Shares under the Offer; AFCC having sufficient financial resources and working capital following completion of the Offer (including to fund currently anticipated financial obligations and pursue desirable business opportunities); potential risks and uncertainties relating to the spread of the novel coronavirus (“COVID-19”); the severity of the disease; the duration of the COVID-19 outbreak; actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact; the potential negative impacts of COVID-19 on the global economy and financial markets and any resulting impact on the satisfaction of the conditions of the Offer such that AFCC may not be required to purchase the Shares and/or may terminate the Offer.

Although the forward-looking statements contained in this press release are based upon assumptions which management believes to be reasonable, AFCC cannot assure investors that actual results will be consistent with these forward-looking statements.  Readers are cautioned not to place undue reliance on forward-looking statements included in this press release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur. Certain of these risks, uncertainties and assumptions, and the factors may impact them, can be found in the Company's disclosure documents on the SEDAR website at www.sedar.com. These forward-looking statements are made as of the date of this press release and AFCC disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.