Imperial Commences Financial and Business Restructuring Process
September 17 2018 - 8:45AM
Imperial Metals Corporation (“Imperial” or the
“Company”) (TSX:III) commences a financial and business
restructuring process.
As of the close of business on September 14th
Imperial completed the following actions:
Extension of the due date of the Company’s
Secured Revolving Senior Credit Facility of $200 million from
October 1, 2018 to February 15, 2019. The Secured Revolving Senior
Credit Facility is now supported by a guarantee from Edco Capital
Corporation, a company controlled by a significant shareholder of
the Company, for an annual fee of 225 basis points. The annual
guarantee fee is less than the reduction in the interest rate
charged on the extended Senior Credit Facility, and results in
reduced interest expense to the Company. All the financial
covenants that were in place on the Senior Credit Facility have
been removed from the extended credit facility.
Extension of the due date of the Company’s
Second Lien Credit Facility of $50 million from December 1, 2018 to
February 15, 2019 and a reduction in the annual fee for the
guarantee of this facility by Edco Capital Corporation, a company
controlled by a significant shareholder of the Company, from 387.5
basis points to 225 basis points.
Extension of the due date of the Company’s
Bridge Loan of $26 million from January 5, 2019 to
February 28, 2019.
Sale of a one half of one percent (0.5%) net
smelter return royalty interest on the Red Chris project for US$17
million to a company of which a significant shareholder of the
Company is a minority equity shareholder. This royalty is subject
to a 100% buyback option granted to Imperial for four years at the
sum of US$17 million plus simple interest thereon at 11% per annum
less the aggregate amount of royalty payments paid. If bought back
within four months, the sum would be US$17 million plus simple
interest thereon at the rate of 6% per annum less the aggregate
amount of royalty payments paid.
Steps have been taken to both rationalize and
improve operations at both of the Company’s operating mines and
these steps are expected to have a positive operational impact in
the fourth quarter of 2018.
The Board of Directors of the Company has also
established a Special Committee. The Special Committee is
authorized to identify, consider, negotiate and potentially
implement all strategic alternatives including sales of some of the
Company’s assets, joint ventures, a recapitalization, and a sale or
merger of the Company.
The Company has had preliminary discussions with
a potential joint venture partner. There are no assurances that the
consideration of any strategic alternative will result in a
transaction. Imperial does not intend to comment on or disclose
developments regarding the process unless it deems further
disclosure is appropriate or required.
Said Brian Kynoch, President of the Company, “We
are thankful to our major shareholders and lenders for supporting
the process designed to help us emerge from a very difficult
period. We are highly confident in the strength and long term
value of our assets”.
About Imperial
Imperial is a Vancouver exploration, mine
development and operating company. The Company, through its
subsidiaries, owns the Red Chris, Mount Polley and Huckleberry
copper mines in British Columbia. Imperial also holds an interest
in the Ruddock Creek lead/zinc property.
Company Contacts
Brian Kynoch | President |
604.669.8959 Andre Deepwell | Chief Financial
Officer | 604.488.2666 Sabine Goetz
| Shareholder Communications |
604.488.2657 | investor@imperialmetals.com
Forward-Looking Information and Risks
Notice
Forward-looking statements relate to future
events or future performance and reflect Company management's
expectations or beliefs regarding future events and include, but
are not limited to, specific statements regarding: the Company’s
commencement of a financial and business restructuring process
which, in addition to the above-outlined actions completed as of
the close of business on September 14, 2018, will also include
consideration by a newly-constituted Special Committee of all
strategic options available to the Company; and expectations that
steps taken to both rationalize and improve operations at both of
the Company’s operating mines will have a positive operational
impact in the fourth quarter of 2018. In certain cases,
forward-looking statements can be identified by the use of words
such as "plans", "expects" or "does not expect", "is expected",
"outlook", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes",
or variations of such words and phrases or statements that certain
actions, events or results "may", "could", "would", "might" or
"will be taken", "occur" or "be achieved" or the negative of these
terms or comparable terminology. In this document certain
forward-looking statements are identified by words including
"expectations", "plan", "planned", "estimated" and "expected". By
their very nature forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Such factors include, among others, risk factors
detailed from time to time in the Company's interim and annual
financial statements and management's discussion and analysis of
those statements, all of which are filed and available for review
on sedar.com. Although the Company has attempted
to identify important factors that could cause actual actions,
events or results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. There can be no assurance that forward-looking statements
will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward
looking statements.
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