Itafos (TSX VENTURE:IFOS) announced today that it has signed a
definitive credit and guaranty agreement (the
Agreement) with a syndicate of lenders to provide
a US$165 million secured term loan facility to Itafos to fund
working capital and other cash requirements of the Arraias
Phosphate Operations and the Conda Phosphate Operations, continued
implementation of the company’s business development initiatives
(including, but not limited to the Paris Hills Project and the
Farim Project) and other general corporate purposes.
The Agreement has been entered into by Itafos,
as the borrower, its wholly-owned subsidiaries, Itafos Brazil
Holdings, Itafos International Holdings Cooperatie UA, Itafos Ltd.,
Itafos II LP and Itafos Conda Holdings, as the guarantors
(collectively, the Guarantors), CL Fertilizers
Holding LLC (formerly known as Zaff LLC) (CLF),
funds managed by BlackRock Financial Management Inc. and its
affiliates, and a syndicate of other lenders, as the lenders
(collectively, the Lenders), and Cortland Capital
Market Services LLC, as the administrative agent.
The key terms of the Agreement are:
- Term of four years commencing on the closing with a bullet
repayment schedule subject to certain prepayment rights and
requirements and applicable prepayment penalties.
- Interest at a per annum rate of 10% commencing on the closing
until 18 months following the closing with 50% payable in cash and
50% payable in kind and 12% thereafter with 75% payable in cash and
25% payable in kind.
- Secured by Itafos’ direct and indirect interest in the
Guarantors and other assets of Itafos and the Guarantors.
- Issuance of bonus shares to the Lenders in an aggregate amount
of 2,750,000 (the Bonus Shares) upon the
closing.
- Other terms, fees and cost reimbursements standard and
customary for similar agreements.
The closing of the Agreement is subject to
satisfaction of certain conditions including, among other things,
delivery and execution of security and other documents and receipt
of the approval of the TSX Venture Exchange (the
TSXV).
Itafos currently has outstanding unsecured
promissory notes (collectively, the Bridge Loans)
in the aggregate principal amount of US$89,961,951, of which
US$33,299,902 is owed to CLF. Pursuant to the terms of the
Agreement, upon the closing of the Agreement, the aggregate
outstanding principal amount of the Bridge Loans, together with all
interest accrued thereon, will be deemed to have been converted
into loans constituting part of the Agreement and/or prepaid, in
whole or in part. Upon such conversion and/or prepayment,
Itafos will be released from its obligations pursuant to the Bridge
Loans.
The Bonus Shares will be subject to resale
restrictions pursuant to a ‘distribution compliance period’ (as
defined in Regulation S under the United States Securities Act of
1933, as amended) of one year from the date the shares were issued.
The Bonus Shares are also subject to a statutory hold period of
four months plus a day from the date of issuance in accordance with
applicable Canadian securities legislation and TSXV requirements,
which hold period will run concurrently with the above referenced
one year restricted period under US securities legislation.
CLF currently beneficially owns, or controls or
directs, approximately 58.5% percent of the outstanding common
shares of Itafos. As a result of the participation of CLF in
the Agreement, and the Bonus Shares to be issued to CLF, the
Agreement is considered to be a “related party transaction” under
Multilateral Instrument 61-101 - Protection of Minority Security
Holders in Special Transactions (MI 61-101) by
virtue of its shareholding being in excess of 10% of Itafos’ issued
and outstanding share capital. The transaction is exempt from (i)
the formal valuation requirements under Section 5.4 of MI 61-101
pursuant to Subsection 5.5(b) of MI 61-101; and (ii) the minority
approval requirements under Section 5.6 of MI 61‑101 pursuant
to either Subsection 5.7(1)(a). Upon
issuance of the Bonus Shares, CLF would beneficially own, or
control or direct, 81,980,065 common shares of Itafos, representing
57.7% of the issued and outstanding shares (on an undiluted
basis).
About Itafos
Itafos is a vertically integrated phosphate
based fertilizers and specialty products company with an attractive
portfolio of long-term strategic assets located in key agricultural
and fertilizer markets worldwide. Itafos is managed by an
experienced and diverse team with extensive operations, commercial
and financial expertise. Itafos owns and operates the Conda
Phosphate Operations, a vertically integrated phosphate business
which produces approximately 540,000 tons per year of mono-ammonium
phosphate, super phosphoric acid, merchant grade phosphoric acid
and specialty products located in Idaho, United States and the
Arraias Phosphate Operations, a vertically integrated phosphate
business which produces approximately 500,000 tons per year of
single super phosphate located in Tocantins, Brazil. Itafos’
development portfolio includes the Paris Hills Project, a
high-grade phosphate mine project located in Idaho, United States,
the Farim Project, a high-grade phosphate mine project located in
Farim, Guinea Bissau, the Santana Project, a vertically integrated
high-grade phosphate mine and fertilizer production project located
in Pará, Brazil, the Araxá Project, a high-grade rare earth
elements, niobium and phosphate mine project located in Minas
Gerais, Brazil and the Mantaro Project, a high-grade phosphate mine
project located in Junin, Peru.
FORWARD LOOKING STATEMENTS
Certain information contained in this news
release constitutes forward looking information. All information
other than information of historical fact is forward looking
information. The use of any of the words “intend”, “anticipate”,
“plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”,
“should”, “would”, “believe”, “predict” and “potential” and similar
expressions are intended to identify forward looking information.
This information involves known and unknown risks, uncertainties
and other factors that may cause actual results or events to differ
materially from those anticipated in such forward looking
information. No assurance can be given that this information will
prove to be correct and such forward looking information included
in this news release should not be unduly relied upon. The forward
looking information provided in this news release is based upon a
number of material factors and assumptions, including the intended
use of funds from the Agreement, that Itafos will satisfy the
conditions precedent to the Agreement including the final
acceptance by the TSXV of the Agreement.
Forward looking information is subject to a
number of risks and other factors that could cause actual results
and events to vary materially from that anticipated by such forward
looking information. Although Itafos has attempted to
identify important factors that could cause actual results to
differ materially from those contained in forward-looking
statements, there may be other factors that cause results not to be
as anticipated, estimated or intended. Factors that may cause
actual results to differ materially from expected results described
in forward-looking statements include, but are not limited to those
risk factors set out in Itafos’ Management Discussion and Analysis
and other disclosure documents available under its profile at
www.sedar.com. Readers are cautioned that the foregoing list
of risks, uncertainties and assumptions are not exhaustive. The
forward looking information included in this news release is
expressly qualified by this cautionary statement and is made as of
the date of this news release. Itafos undertakes no obligation to
publicly update or revise any forward looking information except as
required by applicable securities laws.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS
REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE
POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR
THE ADEQUACY OR ACCURACY OF THIS RELEASE
About The Blueshirt Group
The Blueshirt Group provides capital markets
expertise and strategic financial and media relations counsel to
growth companies and venture capital firms globally. Founded in
1999, The Blueshirt Group has earned its reputation as a leader in
investor relations (IR), financial communications, financial media
relations and crisis management.
For more information, please visit
http://www.blueshirtgroup.com.
FOR FURTHER INFORMATION, PLEASE
CONTACT:
ItafosBrian Zatarain, Chief Executive
Officerbrian.zatarain@itafos.comwww.itafos.com
The Blueshirt GroupGary Dvorchak, CFAManaging
Director+1 (323) 240-5796gary@blueshirtgroup.com
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