Automotive Finco Corp.
TSX VENTURE : AFCC

March 15, 2017 19:24 ET

Automotive Finco Announces Award Grants

TORONTO, ONTARIO--(Marketwired - March 15, 2017) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. THIS NEWS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES IN THE UNITED STATES.

Automotive Finco Corp. (TSX VENTURE:AFCC) (the Company) announces that a total of 866,668 restricted share units (the RSU Awards) were awarded to the directors of the Company and Mr. Kuldeep Billan pursuant to the Company's restricted share unit plan (the RSU Plan). Mr. Billan provides the services of chief executive officer to the Company pursuant to an administration agreement entered into by the Company with Automotive Finance Limited Partnership (the Partnership) and he is the sole director and shareholder of the general partner of the Partnership.

In keeping with the Company's stated performance-orientation and commitment to strong alignment with its shareholders, the RSU Awards have the following terms:

i) as to 50%, they will vest upon the achievement by the Partnership of annualized EBITDA of $6.5 million (where EBITDA means interest revenue less annualized cash operating expenses at the time of measurement less estimated annual Company expenses for the forthcoming 12 months) and expire in 18 months;
ii) as to 25%, they will vest upon the initiation by the Company of an annual dividend of $0.20 / annum and expire in 24 months; and
iii) as to 25%, they will vest upon the achievement by the Company of a share price of $4.50 and will expire in 36 months.

In connection with the RSU Awards, the Company has amended the RSU Plan in order to increase the fixed maximum under the plan (the RSU Plan Amendment). Both the RSU Plan Amendment and each RSU Award are subject to approval by the TSX Venture Exchange (TSXV) and ratification by the Company's shareholders at the Company's 2017 Annual General Meeting of shareholders (the 2017 AGM).

To further incentivize growth, the Company's board has awarded a total of 155,171 deferred share units (the DSU Awards) to the directors of the Company and Mr. Billan pursuant to the Company's deferred share unit plan. The DSU Awards will vest upon the closing of a financing transaction by the Partnership that results in $10 million in annual interest revenue to the Partnership. The DSU Awards expire on December 31, 2017.

Further details regarding the RSU Plan Amendment, the RSU Awards and the DSU Awards will be set out in the management information circular of the Company which will be mailed to shareholders and filed on SEDAR in connection with the 2017 AGM.

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, including statements regarding the future declaration of dividends by the board of directors of the Company. 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 receipt of regulatory and shareholder approval of the amendment to the RSU Plan and the RSU Awards and the potential financial and operational performance of the Company.

Information contained in this news release may be considered to be a financial outlook for the purposes of applicable Canadian securities laws. Financial outlook contained in this news release is based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available, and to become available in the future. Prospective financial information contains forward-looking statements and is based on a number of material assumptions and factors set out above. Actual results may differ significantly from the information presented herein. Readers are cautioned that any such financial outlook contained or referenced herein should not be used for purposes other than those for which it is disclosed herein. The Company and its management believe that the prospective financial information has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results.

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. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause these differences can be found in the Company's disclosure documents on the SEDAR website at www.sedar.com. The Company does not undertake to update any forward looking information except in accordance with applicable securities laws.

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