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
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
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.
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:
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.
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.
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
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
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.
For further information:
Chris Yellowega - President and Chief Executive Officer
Monty Balderston - Executive Vice President and Chief Financial Officer
Northern Frontier Corp.
400, 435 - 4th Avenue SW
Calgary, AB T2P 3A8