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Itafos
Symbol C : IFOS
Shares Issued 140,591,801
Close 2019-09-11 C$ 1.53
Recent Sedar Documents

Itafos issues $15M (U.S.) note to lender CL Fertilizers

2019-09-12 00:08 ET - News Release

An anonymous director reports

ITAFOS ANNOUNCES BORROWING OF CONVERTIBLE UNSECURED SUBORDINATED DEBT IN THE AMOUNT OF US$15,000,000

Itafos has borrowed $15-million (U.S.) from CL Fertilizers Holding LLC (CLF) in the form of convertible unsecured subordinated debt. The debt is evidenced by an unsecured and subordinated promissory note issued by the company in favour of CLF in the principal amount of $15-million (U.S.).

The proposed CLF promissory note is subordinate to the company's existing senior credit facility and subject to the terms of subordination incorporated thereunder. The CLF promissory note has an interest rate of 15 per cent per year and is payable on demand no earlier than six months after the date on which the company's existing senior credit facility is paid in full. The interest is added to and increases the outstanding principal balance of the CLF promissory note on a quarterly basis. The proceeds of the CLF promissory note are expected to be used to finance the general working capital and capital expenditure needs of the company and its subsidiaries. The outstanding principal and interest under the CLF promissory note will automatically convert into shares of the company in connection with any future equity issuances through which the company raises $7.5-million (U.S.) or more in cash.

Upon an equity issuance, the outstanding principal amount of the CLF promissory note will be converted into the number of shares of the company at the conversion price equal to the greater of: (a) the volume-weighted average price of each share received by the company in connection with such equity issuance; and (b) the market price of the shares of the company as of the date of the CLF promissory note. Also, upon an equity issuance, the accrued and unpaid interest owing on the CLF promissory note as of the date of such equity issuance will be converted into the number of shares of the company at the conversion price equal to the greater of: (a) the volume-weighted average price of each share received by the company in connection with such equity issuance; and (b) the market price of the shares of the company as of the date of such equity issuance.

CLF is a related party to the company under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) by virtue of its shareholding being in excess of 10 per cent of the company's issued and outstanding share capital. Accordingly, the issuance by the company to CLF of the CLF promissory note constitutes a related-party transaction under MI 61-101. The issuance of the CLF promissory note by the company to CLF 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).

The CLF promissory note, and any shares into which it may convert upon an equity issuance, is subject to resale restrictions in accordance with applicable law, including a four-month hold period in accordance with TSX Venture Exchange policies.

About Itafos

Itafos is a vertically integrated phosphate fertilizer and specialty product company with an attractive portfolio of long-term strategic businesses and projects located in key fertilizer markets worldwide. Itafos is managed by an experienced and diverse team with extensive operations, and commercial and financial expertise. Itafos owns and operates Itafos Conda, a vertically integrated phosphate fertilizer business with production and sales capacity of approximately 550,000 tonnes per year of monoammonium phosphate (MAP), superphosphoric acid (SPA), merchant-grade phosphoric acid (MGA) and specialty products, including ammonium polyphosphate (APP), located in Idaho, the United States, and Itafos Arraias, a phosphate fertilizer business with production and sales capacity of approximately 500,000 tonnes per year of single superphosphate (SSP), SSP with micronutrients (SSP plus), premium PK compounds and excess sulphuric acid, located in Tocantins, Brazil. Itafos owns and is developing Itafos Paris Hills, a high-grade phosphate mine project, located in Idaho, the United States, 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 Para, Brazil, Itafos Mantaro, a large phosphate mine project, located in Junin, Peru, and Itafos Araxa, a vertically integrated rare earth element and niobium mine and extraction plant project, located in Minas Gerais, Brazil.

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