Mr. Jean-Sebastien David reports
ARIANNE PHOSPHATE CLOSES ON AGREEMENT TO REDUCE DEBT AND EXTEND CREDIT FACILITY
Arianne Phosphate Inc. has closed its previously announced (see press release dated March 18, 2021) agreement whereby its senior secured lender, Mercury Financing Corp., had agreed to exercise its 26.78 million warrants, reducing the amount owed under the credit facility to $24.9-million. The lender also agreed to extend the loan under the credit facility for a period of five years and reduce the annual interest rate to 8 per cent. In conjunction with the amended credit facility, the lender has received 32 million non-transferable share purchase warrants, exercisable at a price of 33 cents per share, good for a period of five years. These warrants are subject to a warrant blocker provision whereby the lender shall not be entitled to exercise warrants resulting in the lender holding more than 19.9 per cent of the issued and outstanding shares of the company. As well, Arianne has also closed on its agreements with subordinated unsecured debt holders in the amount of $5,970,155
(see press release dated March 18, 2021) whereby these debt holders agreed to convert of their debt into 21,709,655 common shares of the company and have 11,028,584 existing warrants originally tied to the subordinated debt cancelled. The securities issued in conjunction with both agreements are subject to a hold period ending Aug. 1, 2021.
"This deal comes at a time when the overall agricultural macro has turned very favourable," said Brian Ostroff, chief executive officer of Arianne Phosphate. "With grain prices at multiyear highs and phosphate fertilizer prices having doubled, Arianne is well placed to advance its project towards development. The closing of this agreement also puts our company on a more solid financial position, resulting in the elimination of $12.5-million of debt, a reduction in interest payments of roughly $2.5-million a year and an extension on the maturity of its credit facility by five years."
These transactions remain subject to final approval of the TSX Venture Exchange.
Jean-Sebastien David, PGeo, qualified person by National Instrument 43-101, has approved this release. Mr. David is also the company's chief operating officer.
About Arianne Phosphate Inc.
Arianne Phosphate is developing the Lac a Paul phosphate deposits located approximately 200 km north of the Saguenay/Lac St. Jean area of Quebec. These deposits will produce a high-quality igneous apatite concentrate grading 39 per cent phosphorus pentoxide with little or no contaminants (feasibility study released in 2013).
We seek Safe Harbor.
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