M3-Brigade Acquisition III Corp. (MBSC) Secures Approval for Greenfire Resources Deal, Warrant Agreement

M3-Brigade III (NYSE:MBSC) announced in an 8-K this morning that its shareholders have approved its combination with Canadian energy producer Greenfire while warrant holders approved a proposal to buy back all outstanding warrants.

The SPAC has not yet revealed redemption figures and it went into the vote with its full trust that had about $303 million available. The company supplemented this with a $50 million PIPE and $50 million in convertible notes with an eye to securing the $100 million minimum cash condition with outside capital.

This funding was only to be drawn if M3-Brigade III’s trust was set to drop below $100 million and the filing noted that “all conditions to closing have been met” in one way or another. The parties planned to distribute $75 million to shareholders from these proceeds.

Greenfire also plans to refinance its 12% senior secured notes due 2025 that were a part of $170 million in existing debt Greenfire had on announcement. If Greenfire takes on more than $25 million in new debt commitments at close, then M3-Brigade III’s sponsor will forfeit 750,000 promote shares (10%) along with 2,500,000 (33%) it has already agreed to cancel.

Warrant holders meanwhile approved an agreement to exchange all 10,000,000 of M3-Brigade III’s outstanding warrants for a right to receive a $0.50 cash payment at close.

The two sides now expect to close the combination on September 27, or earlier if the refinancing is completed is completed ahead of schedule.

M3-Brigade III initially announced its $950 million deal with Greenfire in December 2022. Calgary-based Greenfire Resources is an oil sands producer focused on responsibly drawing hydrocarbons from two sites in Alberta.