Mr. Stephen King reports

NFI ANNOUNCES INCREASE OF PREVIOUSLY ANNOUNCED BOUGHT DEAL PUBLIC OFFERING OF SUBSCRIPTION RECEIPTS TO C$108 MILLION

Due to strong demand, NFI Group Inc. has increased the size of the previously announced bought-deal public offering of subscription receipts to 13,133,000 subscription receipts at a price of $8.25 per subscription receipt, for aggregate gross proceeds of approximately $108-million (approximately $80-million (U.S.)).

The offering is being made through a syndicate of underwriters co-led by BMO Capital Markets, CIBC Capital Markets, National Bank Financial and Scotiabank. The company has also granted the underwriters an overallotment option to purchase up to an additional 1,969,950 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 below)) 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 company's previously announced comprehensive refinancing plan close concurrently.

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 United States 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 part of the refinancing plan, the company entered into an investment agreement on May 11, 2023, 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 (CCP and Blackwell, collectively, the investors), pursuant to which the investors 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 upsized Offering, the company, CCM and the investors have entered into amendments 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 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 $75-million (U.S.), subject to a maximum reduction of $16.7-million (U.S.).

The total gross proceeds to NFI from the private placement and the offering are expected to be $225-million (U.S.) as follows:

• If the overallotment option is not exercised, $145-million (U.S.) from the private placement and $80-million (U.S.) from the offering; or
• If the overallotment option is exercised in full, $133-million (U.S.) from the private placement and $92-million (U.S.) from the offering.

The associated 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 above information supplements the disclosure contained in the company's management information circular dated May 26, 2026, filed by the company in connection with the special meeting of shareholders called to seek approval of the private placement. The meeting is scheduled for Tuesday, June 27, 2023, at 9 a.m. (CT) in a virtual-only meeting format, by way of a live audio-only webcast.

Second lien debt financing

As previously announced, in furtherance of the refinancing plan, the company plans to raise gross proceeds of approximately $175-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 $175-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 to five years.

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 (motor coaches), 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.

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