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Imperial Metals Corp (2)
Symbol III
Shares Issued 127,110,479
Close 2019-03-14 C$ 3.01
Recent Sedar Documents

Imperial Metals refinances $98.44M (U.S.) in 7% notes

2019-03-15 01:57 ET - News Release

Mr. Brian Kynoch reports

IMPERIAL EXTENDS CREDIT FACILITIES AND REFINANCES US$98.455 MILLION OF ITS SENIOR UNSECURED NOTES

Imperial Metals Corp. has obtained extensions regarding the maturity date of a number of its credit facilities as follows:

  • The senior credit facility maturity date has been extended from March 15, 2019, to Sept. 5, 2019.
  • The second-lien credit facility maturity date has been extended from March 15, 2019, to Sept. 9, 2019.
  • The bridge loan maturity date has been extended from March 15, 2019, to Sept. 11, 2019.
  • The junior credit facility maturity date has been extended from March 15, 2019, to Sept. 12, 2019.

The company also announces that it has agreed to refinance $98,445,000 (U.S.) of its 7 per cent $325-million (U.S.) senior unsecured notes due March 15, 2019. The company has requested that Edco Capital Corp., and Edco has agreed, to subscribe for $98,445,000 (U.S.) of additional senior notes (principal amount of $1,000 (U.S.) each) on the same terms and conditions as the existing senior notes. Such financing will enable the company to repay an equal dollar amount of the principal of the senior notes that are payable in full on March 15, 2019, being $98,445,000 (U.S.). The remaining existing holders of senior notes in the principal amount of $226,555,000 (U.S.) have agreed, as has Edco in respect of the additional senior notes, to extend the maturity date of the senior notes until Sept. 15, 2019. The refinancing and extension of the maturity date of the senior notes, as described, are a requirement to achieve the loan extensions set out herein.

As Edco is a related party of the company, the issue of additional senior notes to Edco is a related-party transaction. Accordingly, the transaction was considered and unanimously approved by the directors of the company who are independent of Edco and its affiliates and who do not own any of the senior notes and by the full board of directors of the company after considering both legal and financial advice from external advisers.

The independent directors and the full board of directors both unanimously concluded that the company could utilize existing exemptions from formal valuation requirements and minority vote requirements of applicable related-party transaction securities rules on the basis of the serious financial difficulty facing the company in the interim period pending completion of the previously announced transaction with Newcrest Mining Ltd. The Newcrest asset purchase and joint venture transaction, which, subject to a number of closing conditions, when completed, will permit the company to repay the senior notes, as well as the other above-mentioned credit facilities in full. The independent directors and the full board of directors also unanimously concluded that the company could also rely on another exemption from the minority vote requirement as the additional senior notes represent non-convertible indebtedness being issued to Edco on commercially reasonable terms that are not less advantageous to the company than arm's-length third party terms.

About Imperial Metals Corp.

The company, through its subsidiaries, owns the Red Chris, Mount Polley and Huckleberry copper mines in British Columbia. Imperial also holds a 50-per-cent interest in the Ruddock Creek lead/zinc property. Imperial recently announced an agreement with Newcrest to sell a 70-per-cent interest in Red Chris to Newcrest for $806.5-million (U.S.), while retaining a 30-per-cent interest in the mine. The company and Newcrest will form a joint venture for the operation of the Red Chris mine going forward, with Newcrest acting as the operator.

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