CALGARY,
June 23, 2014 /CNW/ - Northern
Frontier Corp. (TSXV: FFF) (the "Corporation" or
"Northern Frontier") is providing an update on the
proposed Central Water & Equipment Services Ltd. ("Central
Water") acquisition and related offering, its second quarter
operations and the declaration of its second quarter 2014
dividend.
Update on Proposed Central Water Acquisition
and Financing
As previously announced on May 21, 2014, Northern Frontier agreed to acquire
Central Water (the "Acquisition") and was pursuing a
$75.0 million private placement
offering (the "Offering") of senior secured second lien
notes to finance the Acquisition. To date, Northern Frontier has
received varied forms of interest and options for the Offering
including a combination of senior, subordinated and mezzanine
financing structures. Management has determined that some of these
options present a better cost of capital and benefits to our
shareholders. Consequently, the Corporation has terminated the
Offering so that it can pursue these alternative options.
Northern Frontier is focused on completing the
Acquisition to add client and services diversification as well as
the accretive cash flow that Central Water will generate to support
our growth strategy. Management has commenced negotiations to
complete the financing ("Financing") to acquire Central
Water and anticipates that it will close the Acquisition in the
third quarter of 2014. Furthermore, the vendors of Central
Water have agreed to work with Northern Frontier within the
expected timeline to complete the Financing.
Update on Second Quarter Operations
Overall, operating activities to date for the
second quarter of fiscal 2014 have been impacted by high levels of
rain and inclement weather in the Conklin area. A number of projects planned for
the second quarter have been delayed awaiting an improvement in
weather conditions conducive to Northern Frontier's civil
activities. A combination of revenue mix and customer project
deferrals resulting from the wet ground conditions are expected to
have an adverse impact on Northern Frontier's second quarter
financial results. In addition, the termination of the Offering and
delay in the anticipated closing of the Acquisition will result in
the Corporation incurring additional non-operating expenses and not
benefiting from the contributions of Central Water's operating
activities for June 2014.
Northern Frontier has experienced an increase in
operating activities through the month of June, and current
indicators suggest a strong level of activity in the third quarter
to accommodate deferred client projects.
Dividend Declaration
In light of the current status of the
Acquisition, Financing, preliminary expectations of operating and
financial performance for the second quarter and other
considerations, the Board has decided to declare a dividend-in-kind
of 0.0191 of one common share in the capital of the Corporation (a
"Share") on each outstanding Share of the Corporation,
payable on July 15, 2014 to holders
of record at the close of trading on July 3,
2014 (ex-dividend June 30,
2014). The determination of the amount per Share was based
upon $0.065 divided into the closing
share price on June 23, 2014 of
$3.40 per Share. In accordance
with the applicable rules of the TSX Venture Exchange,
"ex-dividend" trading procedures will be applied in connection with
the payment of the dividend.
The board of directors (the "Board")
remains committed to the dividend policy it instituted and believes
that, at present, it is in the Corporation's best interests to
preserve its cash until Northern Frontier completes the Acquisition
and finalizes its capital structure.
Conference Call
Management of Northern Frontier will hold a
conference call on Tuesday, June 24
at 9:00 a.m. Calgary / 11:00
a.m. Toronto time. The call
will feature remarks from Chris
Yellowega, President and CEO and Monty Balderston, Executive Vice President and
CFO and will be followed by a question and answer session.
Conference dial-in instructions are as
follows:
Toronto:
416.764.8688
North America:
888.390.0546
Conference ID: 66308534
A replay of the call will be available 24 hours
after the event until 11:59 p.m. EST
on July 1, 2014. To access the
archived conference call, please dial 416.764.8677 or 888.390.0541
and enter passcode 308534.
Reader Advisory
Securities Law Matters
This news release does not constitute an
offer to sell or the solicitation of an offer to buy any security
and shall not constitute an offer, solicitation or sale of any
securities in any jurisdiction in which such offering, solicitation
or sale would be unlawful.
Forward-Looking Statements
This news release includes certain statements
that constitute forward-looking statements under applicable
securities legislation. All statements other than statements of
historical fact are forward-looking statements. In some cases,
forward-looking statements can be identified by terminology such as
"may", "will", "should", "expect", "plan", "anticipate", "believe",
"estimate", "predict", "potential", "continue", or the negative of
these terms or other comparable terminology. These
forward-looking statements include, among other things, statements
in respect of:
- completion of the Acquisition and the Financing;
- use of net proceeds from the Financing;
- terms of the Financing;
- anticipated benefits of completing the Acquisition and the
Financing;
- expectations of future financial performance of the
Corporation; and
- declaration and form of payment of dividends.
These statements are only predictions and are
based upon current expectations, estimates, projections and
assumptions, which the Corporation believes are reasonable but
which may prove to be incorrect and therefore such forward-looking
statements should not be unduly relied upon. In making such
forward-looking statements, assumptions have been made regarding,
among other things, industry activity, the state of financial
markets, business conditions, continued availability of capital and
financing, future oil and natural gas prices and the ability of the
Corporation to obtain necessary regulatory approvals. Although the
Corporation believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions,
such statements are not guarantees of future performance and actual
results or developments may differ materially from those in the
forward-looking statements.
By its nature, forward-looking information
involves numerous assumptions, known and unknown risks and
uncertainties, both general and specific, that contribute to the
possibility that the predictions, forecasts, projections and other
forward-looking statements will not occur. These risks and
uncertainties include: the possibility that the parties will not
proceed with the Acquisition and the Financing, that the ultimate
terms of the Acquisition and the Financing will differ from those
that are currently contemplated, that the Acquisition and the
Financing will not be successfully completed for any reason
(including the failure to obtain the required approvals from
regulatory authorities), that the Corporation's financial
performance does not transpire as expected, that the Corporation
declares any future dividends or the form of payment thereof and
regulatory changes. Investors are cautioned that forward-looking
statements are not guarantees of future performance and actual
results or developments may differ materially from those projected
in the forward-looking statements. The Corporation has no
obligation to update any forward-looking statements set out in this
news release, except as required by applicable law.
About Northern Frontier Corp.
Northern Frontier's strategic objective is to
create a large industrial and environmental services business
through a buy and build growth strategy. Currently, the Corporation
provides civil construction and excavation services to the
industrial industry, primarily in the in situ Oilsands
region south of Fort McMurray,
Alberta. Through providing these services to large
industrial customers in the steam assisted gravity drainage
("SAGD") region of northeastern Alberta, the Corporation focuses on the
ongoing demand for services to support operating facilities,
sustaining capital expenditures to maintain production levels of
those facilities and the development of new production
capacity.
The Corporation's common shares and common share
purchase warrants are listed on the TSX Venture Exchange under the
trading symbol "FFF" and "FFF.WT", respectively.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
SOURCE Northern Frontier Corp.