Itafos Announces Amendment to Credit and Guaranty Agreement
September 30 2019 - 9:05PM
Itafos (TSX VENTURE: IFOS) (the “
Company”)
announced today that it has executed an amendment (the
“
Amendment”) to its secured term credit facility
(the “
Facility”). The purpose of the Amendment is
to align financial covenants requiring the Company not to exceed
certain ratios at the end of each quarter with the Company’s
business plan and to provide the Company with additional
flexibility to raise working capital financings at Itafos Conda and
Itafos Arraias.
“We are pleased to have the continued support of
our lenders and appreciate their collaboration on this amendment,
which provides us with the financial flexibility needed to support
our strategic initiatives,” said George Burdette, CFO of
Itafos.
The key terms of the Amendment are as
follows:
- sculpted financial covenants considering the Company’s business
plan, including certain new financial covenants related to Itafos
Arraias’ EBITDA and capex;
- additional flexibility to raise working capital financings at
Itafos Conda and Itafos Arraias subject to certain terms and
conditions;
- required capital raise by December 31, 2019 of lesser of US$40
million or 24.9% of Itafos’ market capitalization, inclusive of the
US$15 million convertible unsecured subordinated debt funded by CL
Fertilizers Holding LLC on September 11, 2019;
- additional cash interest of 1% per annum for each quarter that
the Company’s Consolidated Leverage Ratio is equal to or greater
than 4.00:1.00 at the end of such quarter beginning with the
quarter ended September 30, 2019 and 2% per annum until the
required capital raise is completed beginning November 1,
2019;
- increased principal balance of US$2.2 million;
- reduced minimum cash requirements upon closing working capital
financings at Itafos Conda and/or Itafos Arraias; and
- other terms and conditions customary for similar
amendments.
Lenders to the Facility include funds managed by
BlackRock and a syndicate of other lenders including CL Fertilizers
Holding LLC (“CLF”). CLF is a “related party” to
the Company 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 the Company’s issued and outstanding share capital.
Accordingly, the Amendment constitutes a “related party
transaction” under MI 61-101. The Amendment 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
Subsection 5.7(1)(a) and 5.7(1)(f).
About Itafos
The Company is a vertically integrated phosphate
fertilizers and specialty products company with an attractive
portfolio of long-term strategic businesses and projects located in
key fertilizer markets worldwide.
The Company owns, operates and is developing the
following businesses and projects:
- Itafos Conda – a vertically integrated phosphate mine and
fertilizer business with production and sales capacity of
approximately 550kt per year of monoammonium phosphate (“MAP”), MAP
with micronutrients (“MAP+”), superphosphoric acid (“SPA”),
merchant grade phosphoric acid (“MGA”) and specialty products
including ammonium polyphosphate (“APP”) located in Idaho, US;
- Itafos Arraias – a phosphate fertilizer business with
production and sales capacity of approximately 500kt per year of
single superphosphate (“SSP”), SSP with micronutrients (“SSP+”),
premium PK compounds and approximately 40kt per year of excess
sulfuric acid located in Tocantins, Brazil;
- Itafos Paris Hills – a high-grade phosphate mine project
located in Idaho, US;
- Itafos Farim – a high-grade phosphate mine project located in
Farim, Guinea-Bissau;
- Itafos Santana – a vertically integrated high-grade phosphate
mine and fertilizer plant project located in Pará, Brazil;
- Itafos Mantaro – a large phosphate mine project located in
Junin, Peru; and
- Itafos Araxá – a vertically integrated rare earth elements and
niobium mine and extraction plant project located in Minas Gerais,
Brazil.
For more information, or to join the Company’s
mailing list to receive notification of future press releases,
please visit the Company’s website, www.itafos.com.
Forward Looking Information
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.
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 the Company 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 the Company’s Management Discussion and
Analysis and other disclosure documents available under the
Company’s 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.
For further information, please
contact:
Itafos Investor
Relationsinvestor@itafos.comwww.itafos.com
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