/NOT FOR DISTRIBUTION OR DISSEMINATION INTO
THE UNITED STATES OR THROUGH U.S.
NEWSWIRE SERVICES/
TORONTO, May 5, 2021 /CNW/ - MCAN Mortgage Corporation
("MCAN", the "Company" or "we") (TSX: MKP) today announced that it
is offering rights (the "Rights Offering") to eligible holders of
its common shares (the "Common Shares") of record at the close of
business on May 12, 2021 (the "Record
Date").
Pursuant to the Rights Offering, each holder of Common Shares
will receive one right (a "Right") for each
Common Share held. Every 20 Rights will entitle the holder to
subscribe for one whole Common Share of the Company at a price of
$15.65 per Common Share (the
"Subscription Price").
MCAN expects to raise gross proceeds of
approximately $20.4 million from the Rights Offering and
intends to use all of the proceeds less offering expenses to fund
the Company's mortgage lending and investment business. The
expected closing date of the Rights Offering is June 10, 2021.
"As MCAN continues to show solid growth, we require capital in
order to fund our core business, while maintaining adequate amounts
of regulatory capital as a federally-regulated financial
institution," said Karen Weaver,
President and Chief Executive Officer. "Growth in our
corporate assets exceeded 14% in 2020, above our 10% target for the
second year in a row. We have a strong pipeline in 2021 with
robust mortgage market activity. We are seeking capital to
fund this and our continued planned growth. Raising capital
through a Rights Offering provides a benefit to existing
shareholders in terms of the cost of capital raises and the value
provided to existing shareholders should they choose to
subscribe. Over the years, our shareholders have supported
and participated in our previous rights offerings, resulting in
full subscriptions."
Directors and senior officers, collectively holding
approximately 4.4 million Common Shares (including major
shareholder Ian Sutherland), have
indicated their intention to exercise some or all of their Rights,
subject to market conditions. As well, KingSett Canadian
Real Estate Income Fund, an institutional shareholder with a
significant position in the Company's Common Shares, has indicated
its intention to exercise all of its Rights, subject to market
conditions.
The Company will release its Q1 2021 earnings on May 11, 2021 and we invite you to join us at our
virtual Annual and Special Meeting of Shareholders at 4:30 p.m. (Toronto time), also on May 11, 2021. Details of how to attend are
on our website.
The Rights will trade on the Toronto Stock Exchange under the
symbol MKP.RT commencing on May 11,
2021 and will cease trading at 12:00
p.m. (Toronto time) on
June 7, 2021. The ex-rights trading
date for the Common Shares on the Toronto Stock Exchange will be
May 11, 2021. This means that Common
Shares purchased on or following May 11,
2021 will not be entitled to receive Rights under the Rights
Offering. Rights are exercisable until 5:00
p.m. (Toronto time) on
Jun 7, 2021 (the "Expiry Time"),
after which time unexercised Rights will be void and of no value.
Shareholders must hold at least 20 Common Shares to exercise their
Rights, as no fractional Common Shares will be issued.
The Rights Offering includes an additional subscription
privilege under which eligible holders of Rights who fully exercise
their Rights will be entitled to subscribe for additional Common
Shares, if available, that are not otherwise subscribed for in the
Rights Offering.
There are currently 26,129,351 Common Shares outstanding.
Following completion of the Rights Offering, MCAN expects that
there will be approximately 27,435,818 Common Shares
outstanding.
The Rights Offering will be conducted only in the provinces and
territories of Canada (the
"Eligible Jurisdictions"). Accordingly, and subject to the detailed
provisions of a Rights Offering circular (the "Circular"), Rights
will not be delivered to, nor will they be exercisable by, persons
resident outside of the Eligible Jurisdictions. Rather, such Rights
may be sold on their behalf.
Details of the Rights Offering will be set out in a Notice and
Circular, which are available under the Company's profile on SEDAR
at www.sedar.com. The Notice and accompanying direct registration
system statement and subscription form (the "Rights DRS Advice")
will be mailed to each eligible shareholder of MCAN as at the
Record Date. To subscribe, registered shareholders must forward the
completed Rights DRS Advice, together with the applicable funds, to
the depositary and subscription agent, Computershare Investor
Services, Inc., prior to the Expiry Time. Shareholders who own
their Common Shares through an intermediary, such as a bank, trust
company, securities dealer or broker, will receive materials and
instructions from their intermediary.
The Rights and the Common Shares issuable upon exercise of the
Rights have not been, and will not be, registered under the United
States Securities Act of 1933, as amended, and accordingly, the
Rights and the Common Shares are not being publicly offered for
sale in the "United States" or to
"U.S. persons" (as such terms are defined in Regulation S under the
United States Securities Act of 1933, as amended). This press
release does not constitute an offer to sell or the solicitation of
an offer to buy the securities in any jurisdiction. There shall be
no sale of the securities in any jurisdiction in which an offer to
sell, a solicitation of an offer to buy or a sale would be
unlawful.
MCAN is a public company listed on the Toronto Stock Exchange
under the symbol MKP and is a reporting issuer in all provinces and
territories in Canada. MCAN also qualifies as a mortgage
investment corporation ("MIC") under the Income Tax Act
(Canada) (the "Tax
Act").
The Company's primary objective is to generate a reliable
stream of income by investing in a diversified portfolio of
Canadian mortgages, including single family residential,
residential construction, non-residential construction and
commercial loans, as well as other types of securities, loans and
real estate investments. MCAN employs leverage by issuing term
deposits that are eligible for Canada Deposit Insurance Corporation
deposit insurance and are sourced through a network of independent
financial agents. We manage our capital and asset balances based on
the regulations and limits of both the Tax Act and OSFI.
As a MIC, we are entitled to deduct the dividends that we pay
to shareholders from our taxable income. Regular dividends
are treated as interest income to shareholders for income tax
purposes. We are also able to pay capital gains dividends,
which would be treated as capital gains to shareholders for income
tax purposes. Dividends paid to foreign investors may be subject to
withholding taxes. To meet the MIC criteria, 67% of our
non-consolidated assets measured on a tax basis are required to be
held in cash or cash equivalents and residential mortgages.
MCAN's wholly-owned subsidiary, XMC Mortgage Corporation, is
an originator of single family residential mortgage products across
Canada.
A CAUTION ABOUT FORWARD-LOOKING INFORMATION AND
STATEMENTS
This news release contains "forward-looking information" within
the meaning of applicable securities laws. Forward-looking
information can be identified by words such as: "expect", "intend,"
"plan," "seek," "believe," "estimate," "future," "likely," "may,"
"should," "will" and similar forward-looking language. The expected
proceeds to be raised under the Rights Offering and the use thereof
constitutes forward-looking information. The forward-looking
information contained in this news release is based on a number of
assumptions which we believe to be reasonable, including
assumptions relating to the completion of the Rights Offering and
the timing thereof, the amount of proceeds raised, and the expected
use of proceeds from the Rights Offering. Forward-looking
information entails various risks and uncertainties that could
cause actual results to differ materially from those expressed or
implied in such forward-looking information. Risks that could cause
actual results to differ materially from those expressed or implied
in the forward-looking information contained in this press release
include, but are not limited to, that shareholders will not
exercise all or any portion of the Rights, that the Company may not
be able to find a suitable use of the proceeds of the Rights
Offering, the level of dilution that will be experienced by
shareholders who do not exercise all or a portion of their Rights,
failure to complete or a delay in the Rights Offering for any other
reason, the lack of a trading market for the Rights developing and
the trading price of the Common Shares following completion of the
offering. In addition, general risks relating to capital markets,
economic conditions, regulatory changes, as well as the operations
of our business may also cause actual results to differ materially
from those expressed or implied in such forward-looking
information. Forward-looking information is not a guarantee of
future performance, and management's assumptions upon which such
forward-looking information are based may prove to be incorrect.
Investors are cautioned not to place undue reliance on any
forward-looking information contained herein. The Company disclaims
any obligation to update or revise any forward-looking information
contained in this news release, whether as a result of new
information, future events or otherwise, except to the extent
required by law.
SOURCE MCAN Mortgage Corporation