Great Canadian Gaming Corporation
Headnote
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- Application for an order that the issuer is not a reporting issuer under applicable securities laws -- the securities of the issuer are beneficially owned by more than 50 persons and are not traded through any exchange or market -- issuer legally defeased certain debentures -- issuer covenanted to provide certain ongoing disclosure to holders of certain debentures -- relief granted.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction) AND IN THE MATTER OF THE PROCESS FOR CEASE TO BE A REPORTING ISSUER APPLICATIONS AND IN THE MATTER OF GREAT CANADIAN GAMING CORPORATION (the Filer)
ORDER
Background
The principal regulator in the Jurisdiction has received an application from the Filer for an order under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).
Under the Process for Cease to be a Reporting Issuer Applications (for a passport application):
(a) the Ontario Securities Commission (the Principal Regulator) is the principal regulator for this application; and
(b) the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-- 102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador (together with Ontario, the Jurisdictions).
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.
Representations
This order is based on the following facts represented by the Filer:
1. The Filer is the successor corporation formed following closing of the Arrangement (as defined below) and the Amalgamation Transactions (as defined below).
2. The Filer's head office is located at 39 Wynford Drive, North York, Ontario, M3C 3K5.
3. Great Canadian Gaming Corporation (GCGC), a corporation existing under the laws of British Columbia, entered into an arrangement agreement dated November 10, 2020, as amended by an amending agreement dated December 20, 2020 (the Arrangement Agreement), with Raptor Acquisition Corp. (RAC), a corporation existing under the laws of British Columbia.
4. As of September 20, 2021, GCGC had the following issued and outstanding securities: (i) 57,634,278 common shares listed on the Toronto Stock Exchange (the TSX) under the symbol "GC" (the Shares); (ii) 749,933 options to purchase Shares (the Options); (iii) 185,357 restricted share units (RSUs); (iv) 134,882 deferred share units (DSUs); and (v) C$189,000,000 principal amount of TSX listed unsecured debentures (the 2020 Notes) issued and governed pursuant to an indenture dated March 2, 2020 between GCGC and Computershare Trust Company of Canada (Computershare), as supplemented by the First Supplemental Indenture dated September 16, 2021 (the 2020 Indenture).
5. On December 23, 2020, the shareholders of GCGC approved a statutory plan of arrangement under the Business Corporation Act (British Columbia) (BCBCA) pursuant to the Arrangement Agreement (the Arrangement).
6. The Arrangement was completed on September 22, 2021 (the Effective Date).
7. Pursuant to the Arrangement, among other things, the following occurred on the Effective Date:
(a) each Option, whether vested or unvested, was surrendered for a cash payment by GCGC equal to C$45.00 (the Consideration) less the applicable exercise price;
(b) each DSU and RSU, whether vested or unvested, was cancelled in exchange for a cash payment by GCGC equal to the Consideration; and
(c) each Share was transferred and assigned to RAC in exchange for the Consideration.
8. Upon the completion of the Arrangement, all of the outstanding Shares of GCGC were owned by RAC and no other equity securities were outstanding.
9. On the Effective Date, as part of the completion of the Arrangement, the 2020 Notes were deemed to be fully paid, satisfied and discharged by an irrevocable deposit by RAC, on behalf of the Filer, with Computershare of C$211,353,187.50 (theRedemption Funds) for the benefit of the holders of 2020 Notes. The Redemption Funds were sufficient for the purpose of making a redemption payment in an aggregate amount equal to 103.9375% of the principal amount of the 2020 Notes, all accrued and unpaid interest on the 2020 Notes and all interest that would have accrued and been payable on the 2020 Notes up to, and including, December 31, 2022 in respect of the 2020 Notes outstanding as at the closing of the Arrangement, all pursuant to the terms of the 2020 Indenture.
10. On the Effective Date, immediately upon closing of the Arrangement, the subsequent closing of the following two (2) amalgamations resulted in the formation of the Filer as the successor corporation:
(a) GCGC and its wholly-owned subsidiaries Great Canadian Casinos Inc., a corporation existing under the laws of British Columbia and 0811675 BC Ltd., a corporation existing under the laws of British Columbia amalgamated under the BCBCA (the resulting amalgamated entity, Target Amalco) (the Predecessor Amalgamation); and
(b) Target Amalco and RAC amalgamated under the BCBCA, to form the Filer (together with the Predecessor Amalgamation, the Amalgamation Transactions).
11. Upon the completion of the Amalgamation Transactions, all of the outstanding Common Shares of the Filer were owned by Raptor Intermediate Corp., which was the sole shareholder of RAC prior to the Amalgamation Transactions. No other equity securities of the Filer were outstanding.
12. Pursuant to the terms of the 2020 Indenture, following closing of the Arrangement, the redemption and defeasance of the 2020 Notes, and subsequent closing of the Amalgamation Transactions:
(a) neither GCGC, nor the Filer, as the successor corporation, is required to maintain its status as a reporting issuer;
(b) the holders of the 2020 Notes do not have any rights or expectations to continuous disclosure from GCGC or the Filer.
13. The Shares and the 2020 Notes were delisted from the TSX on September 22, 2021.
14. In anticipation of the closing of the Arrangement, RAC and Raptor Co-Issuer LLC, a Delaware limited liability company (the Co-Issuer) issued to Raptor Parent Corp., the sole shareholder of Raptor Intermediate Corp. and their indirect parent corporation (Parent), US$330,000,000 aggregate principal amount of 7.875% senior notes due 2027 (the Parent Notes) pursuant to a senior note indenture dated September 22, 2021 between RAC, the Co-Issuer and Wilmington Trust, National Association, as trustee. Parent is the sole holder of the Parent Notes and purchased the Parent Notes from RAC in order to partially fund RAC's payment of the aggregate Consideration on the Effective Date. Parent is a corporation existing under the laws of British Columbia with its registered and records office at 1700-1055 West Hastings Street, Vancouver, British Columbia V6E 2E9.
15. In anticipation of the closing of the Arrangement, RAC and the Co-Issuer issued US$350,000,000 aggregate principal amount of 4.875% senior secured notes due 2026 (the 2021 Notes) pursuant to a senior secured note indenture dated June 30, 2021 between RAC, the Co-Issuer and Wilmington Trust, National Association, as trustee (the 2021 Indenture).
16. Each of the purchasers of the 2021 Notes (collectively, the 2021 Noteholders) is a sophisticated investor who purchased their respective 2021 Note on the condition that the gross proceeds from the sale of the 2021 Notes would only be released from escrow upon closing of the Arrangement and completion of the subsequent Amalgamation Transactions, resulting in formation of the Filer, a private, non-reporting entity.
17. Each of the 2021 Noteholders has received a copy of an offering memorandum relating to the 2021 Notes which, among other things, sets out:
(a) the details of the Arrangement and Amalgamation Transactions; and
(b) that following the closing of the Arrangement and the Amalgamation Transactions, the 2021 Notes will be outstanding securities of the Filer and Co-Issuer, as co-issuers of the 2021 Notes.
18. Pursuant to section 4.02 of the 2021 Indenture, for so long as any 2021 Notes are outstanding, the Filer covenants to provide the 2021 Noteholders with ongoing disclosure, including, without limitation:
(a) all annual financial information of the Filer for such fiscal year that would be required under applicable Canadian securities laws to be provided to securityholders, which shall include a "Management's Discussion and Analysis of Financial Condition and Results of Operations" for the relevant fiscal year, except to the extent permitted to be excluded by the Canadian Securities Administrators (the CSA);
(b) for the first three quarters of each year, all quarterly financial information of the Filer for such fiscal quarter that would be required under applicable Canadian securities laws to be provided to securityholders, which shall include a "Management's Discussion and Analysis" of financial condition and results of operations for the relevant fiscal quarter, except to the extent permitted to be excluded by the CSA; and
(c) substantially all of the information that would be required to be filed in a material change report pursuant to applicable Canadian securities laws if the Filer were required to file such reports under applicable Canadian securities laws; provided, however, that no such material change reports (or portions thereof or all or a portion of the financial statements that would have otherwise been required thereby) will be required to be delivered (or included) if the Filer determines in its good faith judgment that such event (or information) is not material to holders or the business, assets, operations, financial position or prospects of the Filer and certain of its subsidiaries, taken as a whole.
19. Based on the distribution information provided by the co-lead underwriter of the offering pursuant to which the 2021 Notes were distributed, there are 112 initial beneficial holders of the 2021 Notes, 5 of which are in Ontario (US$17,100,000 principal amount of 2021 Notes representing 4.85% of the aggregate principal amount of the 2021 Notes), 1 of which is in British Columbia (US$5,000,000 principal amount of the 2021 Notes representing 1.42% of the aggregate principal amount of the 2021 Notes) and 106 of which are in the United States (US$327,900,000 principal amount of the 2021 Notes representing 93.73% of the aggregate principal amount of the 2021 Notes).
20. The Filer is not in default of securities legislation in any jurisdiction.
21. The Filer has no intention to seek public financing by way of an offering of securities.
22. The Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U S. Over-the-Counter Markets.
23. Following closing of the Arrangement and the redemption and defeasance of the 2020 Notes on the Effective Date, no securities of the Filer, including debt securities, are traded in Canada or another country on a "marketplace" as defined in National Instrument 21-101 -- Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.
24. The Filer is not eligible to surrender its status as a reporting issuer pursuant to the simplified procedure in NP 11-206 because outstanding securities of the Filer are not beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide.
25. The Filer is not a reporting issuer in any jurisdictions of Canada other than the Jurisdictions. The Filer is applying for exemptive relief to cease to be a reporting issuer in each of the Jurisdictions.
26. Upon the granting of the request exemption relief, the Filer will not be a reporting issuer or the equivalent in any jurisdiction of Canada.
Order
The Principal Regulator is satisfied that the order meets the test set out in the Legislation for the Principal Regulator to make the order.
The decision of the Principal Regulator under the Legislation is that the Order Sought is granted.
Dated at Toronto on this 9th day of November 2021.