Itafos Announces Amended and Restated Credit and Guaranty Agreement
December 31 2019 - 9:06PM
Itafos (TSX VENTURE: IFOS) (the “
Company”)
announced today that it has executed an amended and restated credit
and guaranty agreement (the “
A&R
Credit Agreement”). The A&R Credit Agreement
replaces the existing credit and guaranty agreement dated May 18,
2018, including prior amendments, and further amends certain terms
to provide the Company with additional financial flexibility
including deferring the testing of financial covenants and reducing
cash interest payable in 2020.
The key further amended terms of the A&R
Credit Agreement are as follows:
- delayed testing of financial
covenants until September 30, 2020 and re-sculpted financial
covenants thereafter considering the Company’s business plan;
- reallocated interest of 12% per
annum from 9% payable in cash and 3% payable in kind to 5% payable
in cash and 7% payable in kind until December 6, 2020 or certain
conditions have been met;
- eliminated additional interest of
1% per annum payable in cash for each quarter that the Company’s
Consolidated Secured Leverage Ratio is equal to or greater than
4.00:1.00 at the end of such quarter;
- reduced minimum cash requirement
from US$2.5 million to US$1.0 million; and
- other terms and conditions
customary for similar agreements.
In exchange for eliminating additional interest
of 1% per annum payable in cash for each quarter that the Company’s
Consolidated Secured Leverage Ratio is equal to or greater than
4.00:1.00 at the end of such quarter, the Company intends to issue
five million shares (the “Shares”) to lenders to
the A&R Credit Agreement, subject to approval from the TSX
Venture Exchange. Until the issuance of the Shares is approved by
the TSX Venture Exchange and such Shares have been issued to the
lenders to the A&R Credit Agreement, the Company would be
subject to additional interest of 1.25% per annum payable in kind
for each quarter that the Company’s Consolidated Secured Leverage
Ratio is equal to or greater than 4.00:1.00 at the end of such
quarter.
Lenders to the A&R Credit Agreement 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 A&R Credit
Agreement constitutes a “related party transaction” under MI
61-101. The A&R Credit Agreement 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).
In accordance with United States securities
legislation, the 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 are issued.
Concurrently, in accordance with applicable Canadian securities
legislation, the Shares will be subject to a statutory hold period
of four months plus a day from the date the Shares are issued.
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 Farim – a high-grade
phosphate mine project located in Farim, Guinea-Bissau;
- Itafos Paris Hills – a high-grade
phosphate mine project located in Idaho, US;
- 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 news 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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