Mr. Pipasu Soni reports

NFI ANNOUNCES C$88 MILLION BOUGHT DEAL PUBLIC OFFERING OF SUBSCRIPTION RECEIPTS AND PROVIDES UPDATE TO COMPREHENSIVE REFINANCING PLAN

NFI Group Inc. has provided an update to its previously announced comprehensive refinancing plan as NFI has entered into an agreement with a syndicate of underwriters co-led by BMO Capital Markets, CIBC Capital Markets, National Bank Financial and Scotiabank, pursuant to which the company will issue, on a bought deal basis, 10,709,000 subscription receipts at a price of $8.25 (approximately $6.07 (U.S.)) per subscription receipt for gross proceeds of approximately $88-million (approximately $65-million (U.S.)).

The company has also granted the underwriters an overallotment option to purchase up to an additional 1,606,350 subscription receipts, representing 15 per cent of the size of the offering, on the same terms as the offering, exercisable in whole or in part at any time on or prior to June 27, 2023, to cover overallotments, if any.

The company intends to use the net proceeds of the offering (together with the net proceeds of the private placement (as defined herein)) to repay outstanding indebtedness under NFI's existing credit facilities and for working capital and general corporate purposes, once the proceeds from the offering are released from escrow.

Each subscription receipt represents the right of the holder to receive, without payment of additional consideration, one common share of NFI upon satisfaction of certain escrow release conditions, including that the other elements of the refinancing plan close concurrently.

"Since the announcement of our comprehensive refinancing plan, we've received significant interest from new and existing shareholders regarding participation in an equity or second-lien financing. This bought deal will allow us to capitalize on this interest and, when combined with the private placement with Coliseum, will increase our total equity proceeds to $200-million. Coliseum has expressed their support and have agreed to amend the terms of our private placement to reflect this offering," said Pipasu Soni, chief financial officer of NFI. "We've also advanced the proposed second-lien debt financing, which is expected to generate $200-million in total proceeds, through numerous positive conversations with potential partners. The expected combined proceeds of $400-million will lower our total debt balances, improve liquidity and strengthen our financial position as we look to drive volume, revenue and adjusted EBITDA recovery in 2023 and beyond. Today's announcements also support our expectation that we will complete our full refinancing plan by June 30."

The subscription receipts will be offered in each of the provinces and territories of Canada (other than Quebec) by way of a prospectus supplement to the company's short form base shelf prospectus dated Feb. 27, 2023, and by way of private placement in the United States to qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act of 1933, as amended, and such other jurisdictions as may be agreed to by the company on a private placement basis.

Closing of the offering is expected to occur on or about June 6, 2023. The offering is subject to customary regulatory approvals, including the approval of the Toronto Stock Exchange.

Amendment to investment agreement

As previously announced on May 11, 2023, as part of the refinancing plan, the company entered into an investment agreement with Coliseum Capital Management LLC (CCM), Coliseum Capital Partners LP (CCP) and Blackwell Partners LLC -- Series A, a fund and an account managed by CCM, respectively, pursuant to which the investors have agreed to purchase from the company an aggregate of 24,363,702 shares at a subscription price of $6.1567 (U.S.) (approximately $8.25) per share for aggregate gross proceeds to NFI of approximately $150-million (U.S.) (approximately $201-million).

In conjunction with the offering, the company, CCM and the investors have entered into an amendment to the investment agreement, pursuant to which the parties have agreed that the aggregate subscription price for the shares to be purchased by the investors in the private placement (and the corresponding number of common shares to be purchased) shall be reduced to the extent the gross proceeds received by NFI from the offering (including, for greater certainty, any exercise of the overallotment option) exceeds $50-million (U.S.), subject to a maximum reduction of $25-million (U.S.).

The total gross proceeds to NFI from the private placement and the offering are expected to be $200-million (U.S.) as follows:

• If the overallotment option is not exercised, $135-million (U.S.) from the private placement and $65-million (U.S.) from the offering;
• Or if the overallotment option is exercised in full, $125-million (U.S.) from the private placement and $75-million (U.S.) from the offering.

The attached table sets forth Coliseum's share ownership prior to and following completion of the private placement and the offering, with or without the exercise of the overallotment option.

The information supplements the disclosure contained in the information circular (as defined herein).

Amendments to the company's credit facilities

Under the refinancing plan, NFI will amend its existing senior secured credit facilities and extend its senior unsecured debt facilities with the Manitoba Development Corp. (MDC) and Export Development Canada (EDC). As previously announced on May 10, 2023, the company has received confirmation of credit approval from its banking partners for proposed amendments to its North American and United Kingdom senior secured credit facilities and MDC and EDC have confirmed their intention to extend the maturity of their respective senior unsecured debt facilities to April 30, 2026. The company continues to work with these parties to finalize the documentation relating to such facilities.

Second-lien debt financing

As previously announced, in furtherance of the refinancing plan, the company plans to raise gross proceeds of approximately $200-million (U.S.) from a second-lien debt financing. The total expected proceeds from the second-lien debt financing were originally expected to be in a range of $200-million (U.S.) to $250-million (U.S.), but have been updated to $200-million (U.S.) to reflect the expected increased proceeds from the offering and the private placement. NFI is in discussions with a number of potential investors who have expressed interest in participating in such financing. The second-lien debt financing is expected to be on customary market terms, with an anticipated coupon in the range of 12 per cent to 15 per cent and an anticipated maturity of 3.5 years to five years.

Closing of refinancing plan transactions

NFI expects to close all of the components of the refinancing plan, including the amendments to the company's credit facilities, the private placement and the second-lien debt financing, concurrently and, in any event, prior to the end of June, 2023. At the time of such closing, all subscription receipts issued in the offering will be automatically exchanged for shares and the proceeds from the offering will be released from escrow to NFI.

Special meeting of shareholders

As previously disclosed, the company will host a special meeting of its shareholders on Tuesday, June 27, 2023, at 9 a.m. Central Time in a virtual-only meeting format, by way of a live audio-only webcast. The purpose of the meeting is to consider and, if deemed advisable, to approve the private placement. The record date for determining the shareholders entitled to vote at the meeting has been set as the close of business on May 23, 2023. The notice of meeting, form of proxy and management information circular have been filed and are available under the company's SEDAR profile. These materials are also in the process of being mailed to NFI's shareholders.

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-deck and double-deck buses), Plaxton (motorcoaches), 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 Toronto Stock Exchange under the symbol NFI and its convertible debentures trade on the TSX under the symbol NFI.DB.

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