Element Financial Corporation

Element Financial Corporation

May 31, 2013 10:09 ET

Element Financial Announces Increase of Previously Announced Equity Financing to $261 Million

TORONTO, ONTARIO--(Marketwired - May 31, 2013) - Element Financial Corporation (TSX:EFN) -


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. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Element Financial Corporation ("Element") is pleased to announce that it has amended the terms of its previously announced private placement bought deal offering of special warrants of Element ("Special Warrants") to increase the size of the offering to approximately $261 million (the "Offering"). Under the amended terms of the Offering, a syndicate of underwriters co-led by GMP Securities L.P., BMO Capital Markets and Barclays and including Scotiabank, National Bank Financial Inc., RBC Capital Markets, TD Securities Inc., Cormark Securities Inc. and Manulife Securities Incorporated (collectively, the "Underwriters") have agreed to purchase, on a bought deal private placement basis, an aggregate of 25,750,000 Special Warrants at a price of $10.15 per Special Warrant for gross proceeds of approximately $261 million. Each Special Warrant will be exercisable into one common share in the capital of Element (the "Common Shares") for no additional consideration. The Company has granted the Underwriters an option (the "Over-Allotment Option"), which may be exercised by the Underwriters at any time up to 48 hours prior to the closing of the Offering, to increase the size of the Offering by up to an additional 3,862,500 Special Warrants for additional gross proceeds of up to $39 million, representing 15% of the Offering. If the Over-Allotment Option is exercised in full, total gross proceeds of the Offering shall be approximately $300 million.

The proceeds of the Offering, including any proceeds from the Over-Allotment Option, will be used to partially fund the previously announced acquisition of GE Capital's Canadian fleet portfolio and Element's future growth as well as for general corporate purposes.

The Special Warrants will be deemed to be exercised upon the earlier of: (i) a date that is no later than the fifth business day after the date of issuance of a receipt for a final prospectus qualifying the issuance of Common Shares underlying the Special Warrants; and (ii) four months and one day following the closing of the Offering. Element has agreed to use commercially reasonable efforts to file a prospectus qualifying the issuance of the Common Shares underlying the Special Warrants within 75 days of closing of the Offering.

The Offering is scheduled to close on June 18, 2013, and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange.

About Element Financial Corporation

With total assets of approximately $1.77 billion, Element Financial Corporation is Canada's leading independent equipment finance company. Element operates nationally in three segments of the equipment finance market - Element Capital provides large ticket equipment leasing, Element Finance serves the mid-ticket equipment finance market and Element Fleet provides vehicle fleet leasing and management solutions through the Company's TLS Fleet Management division.

Forward-Looking Statements

This release includes forward-looking statements regarding Element and its business. Such statements are based on the current expectations and views of future events of Element's management. In some cases the forward-looking statements can be identified by words or phrases such as "may", "will", "expect", "plan", "anticipate", "intend", "potential", "estimate", "believe" or the negative of these terms, or other similar expressions intended to identify forward-looking statements. The forward-looking events and circumstances discussed in this release, including the expected completion of the Offering; the intention of Element to file a prospectus qualifying the Common Shares issuable pursuant to the Special Warrants; the integration of GE Capital's Canadian fleet portfolio into Element following completion of the Transaction and any synergies related thereto and the anticipated growth of the Element business; as well as the intended use of proceeds from the Offering, may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Element undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

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