Nemaska Lithium is granted Court approval of its acquisition by creditors

Nemaska ​​Lithium Inc. (“Nemaska Lithium” or the “Corporation”) announces today that the Corporation, Nemaska Lithium Whabouchi Mine Inc., Nemaska Lithium Shawinigan Transformation Inc., Nemaska Lithium P1P Inc. and Nemaska Lithium Innovation Inc. (collectively, the “Nemaska Entities”) have obtained an approval and vesting order (the “Approval and Vesting Order”) from the Superior Court of Québec (Commercial Division) (the “Court”) issued in connection with the proceedings under the Companies’ Creditors Arrangement Act (the “CCAA”).

The Approval and Vesting Order approved the previously announced transactions (collectively, the “Transaction”) contemplated in the sale proposal structured as a credit bid from a group made up of the Corporation’s largest secured creditor, Orion Mine Finance (“Orion”), Investissement Québec and The Pallinghurst Group, acting through a new entity named Quebec Lithium Partners (The Pallinghurst Group collectively with Investissement Québec being hereinafter, the “Sponsors”). Pursuant to the Transaction, the Sponsors are acquiring, on a 50-50 basis, all of the issued and outstanding shares of an entity resulting from the amalgamation of the Nemaska Entities, which will itself emerge from the CCAA proceedings and subsequently be amalgamated with entities currently controlled by Orion to form the entity that will operate the business of the Corporation (“NewNemaska Lithium”). New Nemaska Lithium will apply to the Canadian securities regulatory authorities for a decision that, following the completion of the Transaction, it would cease being a reporting issuer under applicable Canadian securities laws.

The Approval and Vesting Order also approved the implementation of a reorganization of the Nemaska Entities that involves: (a) the incorporation of two new entities (collectively, “Residual Nemaska Lithium”) to ultimately hold certain excluded liabilities of the Nemaska Entities, certain excluded cash of the Corporation on hand at closing, subject to certain adjustments (the “Residual Cash”), and certain excluded assets (the “Excluded Assets”), and (b) the exchange of the shares of the Corporation, on a one-for-one basis for common shares of Residual Nemaska Lithium (the “Exchange”), that will result in Residual Nemaska Lithium becoming a successor reporting issuer under applicable Canadian securities laws.

The Approval and Vesting Order will enable Residual Nemaska Lithium to submit a joint plan of compromise and arrangement and to call a creditors’ meeting to vote on such plan. Such meeting will be called shorlty after the closing of the Transaction.

The Excluded Assets include, among other things, 15,000,000 common shares in the capital of Vision Lithium Inc. currently held by the Corporation, which, based on the closing price of such shares on the TSX Venture Exchange on October 14, 2020, are worth approximately $525,000. Unfortunately, based on the terms of the Transaction and the consideration to be received by Residual Nemaska Lithium, holders of the Corporation’s shares will not receive any payments for, or distributions on, their shares in connection with the CCAA proceedings, nor will they hold any interest in New Nemaska Lithium following the completion of the plan of compromise or arrangement.

Exchange of Shares

The Exchange will occur on the date that is four business days before the closing date of the Transaction. At the same time all issued and outstanding options, warrants or other securities of the Corporation (including securities convertible, exchangeable or exercisable for shares of the Corporation) shall be canceled for no consideration. Following the Exchange, each share certificate (or other evidence of ownership of shares of the Corporation) representing shares of the Corporation shall be deemed to represent for all purposes the same number of common shares of Residual Nemaska Lithium. Accordingly, shareholders will not be required to surrender their share certificates representing shares of the Corporation and in the context of the Transaction, since there is no residual value for shareholders, no action is required from shareholders to complete the Exchange.

The Corporation will confirm by press release once the Exchange occurs. All non-residents of Canada should determine with their own tax advisors if any tax filings are required related to the disposition having regards to their own circumstances.

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