OPAL Fuels Inc., a leading vertically integrated producer and distributor of renewable natural gas, announced that it has commenced an exchange offer (the “Offer”) and consent solicitation (the “Consent Solicitation”) relating to its outstanding (i) public warrants to purchase shares of Class A common stock of the Company, par value $0.0001 per share (the “Class A common stock”), which warrants trade on The Nasdaq Capital Market under the symbol “OPALW” (the “public warrants”), and (ii) private placement warrants to purchase shares of Class A common stock (the “private placement warrants” and, together with the public warrants, the “warrants”). The purpose of the Offer and Consent Solicitation is to simplify the Company’s capital structure and reduce the potential dilutive impact of the warrants, thereby providing the Company with more flexibility for financing its operations in the future.
Exchange Offer and Consent Solicitation Relating to Warrants
The Company is offering to all holders of the warrants the opportunity to receive 0.250 shares of Class A common stock in exchange for each outstanding warrant tendered by the holder and exchanged pursuant to the Offer. Pursuant to the Offer, the Company is offering up to an aggregate of 3,861,623 shares of its Class A common stock in exchange for the warrants.
Concurrently with the Offer, the Company is also soliciting consents from holders of the warrants to amend the warrant agreement that governs all of the warrants (the “Warrant Agreement”) to permit the Company to require that each warrant that is outstanding upon the closing of the Offer be exchanged for 0.225 shares of Class A common stock, which is a ratio 10% less than the exchange ratio applicable to the Offer (such amendment, the “Warrant Amendment”). Pursuant to the terms of the Warrant Agreement, all except certain specified modifications or amendments require the vote or written consent of holders of at least 65% of each of the outstanding public warrants and the outstanding private placement warrants. Parties representing approximately 53.30% of the outstanding public warrants and approximately 100% of the outstanding private placement warrants have agreed to tender their public warrants and private placement warrants (as applicable) in the Offer and to consent to the Warrant Amendment in the Consent Solicitation, pursuant to a tender and support agreement. Accordingly, if holders of an additional approximately 11.70% of our outstanding public warrants consent to the Warrant Amendment in the Consent Solicitation, and the other conditions of the Offer are satisfied or waived, then the Warrant Amendment will be adopted. The offering period will continue until 11:59 p.m., Eastern Time, on December 16, 2022, or such later time and date to which the Company may extend (the “Expiration Date”), as described in the Company’s Schedule TO and Prospectus/Offer to Exchange (each as defined below). Tendered warrants may be withdrawn by holders at any time prior to the Expiration Date.
The Offer and Consent Solicitation are being made pursuant to a prospectus/offer to exchange, dated November 18, 2022 (the “Prospectus/Offer to Exchange”), and Schedule TO, dated November 18, 2022 (the “Schedule TO”), each of which have been filed with the U.S. Securities and Exchange Commission (the “SEC”) and more fully set forth the terms and conditions of the Offer and Consent Solicitation.
The Company’s Class A common stock and public warrants are listed on The Nasdaq Capital Market under the symbols “OPAL” and “OPALW,” respectively. As of November 17, 2022, there were (i) 25,671,390 shares of Class A common stock outstanding, (ii) 144,399,037 shares of the Company’s Class D common stock, par value of $0.0001 per share, outstanding, and (iii) a total of 15,446,494 warrants outstanding, consisting of 6,223,233 public warrants and 9,223,261 private placement warrants. Assuming all warrant holders tender their warrants for exchange in the Offer, the Company would expect to issue up to 3,861,623 shares of Class A common stock, resulting in 29,533,013 shares of Class A common stock outstanding (an increase of approximately 15.0% of total Class A common stock outstanding and an increase of approximately 2.3% in total issued share capital), and no public or private placement warrants outstanding.
