M3-Brigade Acquisition III Corp. (MBSC) Proposes Warrant Offer
by Marlena Haddad on 2023-08-14 at 5:51pm

M3-Brigade III (NYSE:MBSC) noted in a proxy filing today that it would be putting forward a proposal at an upcoming shareholder vote to amend the warrant agreement and buy back all outstanding warrants.

The proposed amendment involves exchanging each MBSC public warrant, allowing holders to purchase one share of MBSC Class A common stock, for a cash payment of $0.50 per warrant upon closing.

The vote is to be held on September 11 primarily to approve of MBSC’s combination with energy company Greenfire. However, this signifies yet another instance of a growing pattern of SPACs aiming to address their warrant overhang sooner rather than later.

Prior to the closing of the deal, Greenfire plans to undergo a series of corporate steps, which involves Greenfire shareholders receiving new common shares and cash equal to their pro rata share of $75 million as part of the share consideration and cash consideration. Additionally, some Greenfire Performance Warrants will be canceled for cash payment, while others will be converted into new Greenfire performance warrants.

The number of New Greenfire Common Shares comprising the “share consideration” will equal the quotient of: the Greenfire Pre-Money equity value of $950 million minus the Greenfire net indebtedness  of $170,000,000 minus $75 million, minus the amount of unpaid transaction expenses of MBSC and Greenfire, minus an amount equal to the number of shares of MBSC Class B common stock, issued and outstanding at the effective time of the merger multiplied by $10.10, and divided by $10.10.

Immediately prior to the merger being effective, MBSC will redeem all of the public warrants at $0.50 per warrant, which will be effected by MBSC by way of an amendment to the public warrant agreement if the proposal to effectuate the amendment is approved by holders.

Additionally, prior the merger, if the amount of the new Greenfire debt financing issued at closing exceeds $25 million then 750,000 MBSC Class B Common Shares held by the MBSC sponsor, will be forfeited and cancelled for no consideration. And, 3.26 million MBSC private placement warrants and 2.5 million MBSC Class B common shares held by the sponsor will be forfeited and cancelled for no consideration.

M3-Brigade III announced its $950 million deal with energy company Greenfire in December 2022. Calgary-based Greenfire Resources is an intermediate-sized and low-cost oil sands producer focused on responsible energy development in Canada.

 

M3-Brigade Acquisition III Corp. (MBSC) Proposes Warrant Offer
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