Mr. Paul Soubry reports

NFI ANNOUNCES $150 MILLION PRIVATE PLACEMENT OF COMMON SHARES WITH COLISEUM CAPITAL MANAGEMENT

As part of its previously announced comprehensive refinancing plan, NFI Group Inc. has entered into an investment agreement with Coliseum Capital Management LLC, as manager of certain funds and accounts, current holder of 12.4 per cent of NFI's issued and outstanding common shares. Under the terms of the investment agreement, Coliseum has agreed to subscribe for and purchase from the company an aggregate of 24,363,702 shares, on a private placement basis, at a subscription price of $6.1567 (approximately $8.251 (Canadian)) per share, for aggregate gross proceeds to NFI of $150-million (approximately $201-million (Canadian)). All amounts shown in this press release are in U.S. dollars unless otherwise indicated.

NFI intends to use the proceeds from the private placement to repay outstanding indebtedness under NFI's existing credit facilities and for working capital and general corporate purposes.

Pursuant to the investment agreement, Coliseum is permitted to nominate a member to the board of directors of NFI for so long as Coliseum owns, controls or directs at least 10 per cent of the outstanding shares. Adam Gray, managing partner and co-founder of Coliseum, has served on the board since March, 2012, and was re-elected to the board at the company's most recent shareholder meeting held on May 4, 2023.

Paul Soubry, president and chief executive officer, NFI, said: "Coliseum has been a long-standing supporter of NFI, and we are thrilled that the firm has reinforced its commitment to our financial recovery. This additional investment by Coliseum, which builds upon our established long-term partnership, will help us to execute our refinancing, solidify our leadership position and further capitalize upon the unprecedented demand for our products. Adam has been a valuable resource to the board and management team for more than a decade; we are confident his continued contributions will serve the company well as we seek to maximize value for all NFI stakeholders."

Mr. Gray commented: "We are pleased to support the company as the cornerstone investor in its recapitalization, providing NFI with the runway and flexibility required to allow Paul and his management team to focus fully upon advancing NFI's mission and leadership position. As governments around the world make record investments into public transit to achieve emission reduction targets, NFI is well positioned to leverage its deep transport experience, unparalleled service, technology innovation and customized manufacturing, to achieve financial outperformance."

The investment agreement entitles Coliseum to pre-emptive rights to purchase additional securities in certain circumstances to maintain its proportionate interest in the company. Coliseum has also agreed to certain disposition and standstill restrictions, including a requirement to hold the shares it acquires through the private placement for a period of at least one year and a restriction on acquisitions of additional NFI securities (other than under its pre-emptive right) until the later of May 31, 2024, or nine months after Coliseum no longer has a representative on the board. Coliseum will also be entitled to customary registration rights (which would permit Coliseum to sell its shares in a broad distribution to investors) pursuant to a registration rights agreement to be entered into between the parties on closing of the private placement.

In addition, pursuant to the terms of the investment agreement, NFI, in its sole discretion, may choose to complete an issuance of shares (or subscription receipts each convertible into one share) to investors other than Coliseum, at a price per security at least equal to the subscription price and for gross proceeds to NFI of no more than $75-million, prior to or concurrently with closing of the private placement. In the event of an alternative offering, the number of shares to be purchased by Coliseum will be reduced by an amount equal to the gross proceeds received by NFI from such alternative offering (subject to a maximum reduction of $50-million).

Following completion of the private placement, Coliseum will hold 33,901,102 shares (or 25,779,868 shares if $50-million of gross proceeds are raised from an alternative offering at the subscription price), representing approximately 33.39 per cent (or 25.39 per cent if $50-million of gross proceeds is raised from an alternative offering at the subscription price) of NFI's issued and outstanding shares, on a postclosing basis.

Mr. Soubry concluded: "While the past three years have been challenged by the COVID-19 pandemic, associated supply chain disruption and heightened inflation impacts, we believe that the future is extremely bright at NFI. The revised credit arrangements and this infusion of capital will solidify our position as we work to deliver upon our record backlog and achieve our near-term guidance and longer-term outlook."

Closing of the private placement is subject to customary conditions precedent and applicable regulatory approvals, including (i) receipt of the requisite approvals by the holders of shares under applicable securities laws and the policies of the Toronto Stock Exchange (TSX), and (ii) receipt of requisite regulatory approvals, including under the Competition Act (Canada) and the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976. Furthermore, completion of the private placement is conditional upon the concurrent completion of the previously announced amendments to NFI's existing credit facilities. If, among other things, NFI shareholders do not approve the private placement, Coliseum will be entitled to a break fee of 1 per cent of the maximum aggregate subscription price per month until termination and be entitled, subject to applicable regulatory restrictions, to acquire a certain number of shares at the subscription price and participate at a level up to 50 per cent in future equity offerings (at the applicable offering price) until May 31, 2024.

The private placement is expected to close on or prior to June 30, 2023.

The company intends to seek the requisite shareholder approval for the private placement at a special meeting of shareholders expected to be held in June, 2023. A management information circular containing details of the private placement and voting instructions for shareholders will be mailed to shareholders as soon as practicable. This information will also be available on NFI's website and filed on SEDAR.

Board recommendation

The negotiation of the private placement was supervised by and with the active involvement of the board (excluding Mr. Gray), with the assistance of NFI's legal and financial advisers. The private placement resulted from a process involving discussions with, and receipt of proposals from, multiple potential investors. Following the evaluation of alternatives available to the company and extensive negotiations, the board (excluding Mr. Gray) unanimously determined that the private placement is in the best interests of NFI and recommends that the shareholders of the company, other than Coliseum, its affiliates and other interested parties, vote in favour of the private placement at the special meeting of shareholders to be held to approve the private placement.

Regulatory matters

Coliseum, through the funds and accounts that it manages, owns, controls or directs greater than 10 per cent of the outstanding shares. As such, the private placement constitutes a related party transaction under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions and is subject to approval by the minority shareholders in accordance with MI 61-101. NFI, however, is relying on the exemption from the formal valuation requirement of MI 61-101 contained in Section 5.5(c) of MI 61-101 in respect of the private placement as the shares to be issued are being distributed for cash consideration, neither the company nor Coliseum have knowledge of any material undisclosed information concerning the company and the circular to be prepared for shareholders in connection with the special meeting to approve the private placement will include the requisite disclosure contemplated by Section 5.5(c) of MI 61-101.

Further details will be included in a material change report to be filed by the company. Such material change report has not been filed 21 days before the entering into of the investment agreement as the terms thereof were not finalized and approved by all parties until immediately prior to the entering into of such agreement.

Additional information

A copy of the investment agreement will be filed on the company's profile on SEDAR. The above description of the terms and conditions of the investment agreement is qualified in its entirety by the full text of the investment agreement. The management information circular will also be filed on the company's profile on SEDAR.

BMO Capital Markets is acting as financial adviser and private placement agent, Torys LLP is acting as legal counsel to NFI, and Norton Rose Fulbright Canada LLP is acting as legal counsel to Coliseum in connection with the private placement.

Adjustment to May 10, 2023, press release

NFI's press release dated May 10, 2023, announcing NFI's comprehensive refinancing plan, had an error within the covenant table under the "Anticipated financial covenants under the amendments" heading. Under the columns with senior secured net leverage ratio and total net leverage ratio, the covenant should have read less than or equal to instead of the reported greater than or equal to.

About NFI Group Inc.

Leveraging 450 years of combined experience, NFI is leading the electrification of mass mobility around the world. With zero-emission buses and coaches, infrastructure, and technology, NFI meets today's urban demands for scalable smart mobility solutions. Together, NFI is enabling more livable cities through connected, clean and sustainable transportation.

With 7,700 team members in 10 countries, NFI is a leading global bus manufacturer of mass mobility solutions under the brands New Flyer (heavy-duty transit buses), MCI (motorcoaches), Alexander Dennis Ltd. (single and double-deck buses), Plaxton (motor coaches), ARBOC (low-floor cutaway and medium-duty buses) and NFI Parts. NFI currently offers the widest range of sustainable drive systems available, including zero-emission electric (trolley, battery and fuel cell), natural gas, electric hybrid and clean diesel. In total, NFI supports its installed base of over 100,000 buses and coaches around the world. NFI's shares trade on the TSX under the symbol NFI and its convertible debentures trade on the TSX under the symbol NFI.DB.

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