Itafos Announces Closing of US$36,000,000 Capital Raise Through Non-Brokered Private Placement Financing and Amendment to Uns...
December 31 2019 - 9:59PM
Itafos (TSX VENTURE: IFOS) (the “
Company”)
announced today that it has completed its previously announced
US$36,000,000 capital raise with CL Fertilizers Holding LLC
(“
CLF”) through a non-brokered private placement
financing of US$15,000,000 and an amendment to increase the
availability of a previously issued unsecured subordinated
promissory note by US$21,000,000. The proceeds of the capital raise
are expected to be used to fund general working capital and capital
expenditure needs of the Company and its subsidiaries.
CLF subscribed for 38,076,923 shares in the
capital of the Company (the “Subject Shares”) at
an offering price of CAD$0.52 per share on a non-brokered private
placement basis, for aggregate gross proceeds of US$15,000,000
(equivalent to approximately CAD$19,800,000) (the “Private
Placement”). No finder’s fees or commissions were paid in
connection with the Private Placement.
The Company and CLF have also amended the
convertible unsecured and subordinated promissory note in favor of
CLF that was issued by the Company on September 11, 2019, to make
the promissory note non-convertible and increase the availability
by US$21,000,000 (the “Amended CLF Promissory
Note” and together with the Private Placement, the
“Transaction”). As of today, the Company has
borrowed US$5,000,000 of the available US$21,000,000, with the
balance of US$16,000,000 remaining available to be drawn by the
Company at its sole discretion through December 31, 2020. An
availability fee of 4% per year shall apply on undrawn amounts
during the availability period with such fee to be capitalized and
added to principal on a quarterly basis. Other than the
changes specified in this news release, all other terms of the
Amended CLF Promissory Note have remained unchanged.
In connection with the Transaction, the Company
and CLF have entered into an investor rights agreement (the
“IRA”). Pursuant to the IRA, the Company has
granted CLF, among other rights, the right to (i) participate
pro-rata on future equity issuances, (ii) designate two nominees to
the Company’s Board of Directors so long as CLF holds more than 20%
of the Company’s outstanding shares on an undiluted basis and (iii)
designate one nominee to the Company’s Board of Directors so long
as CLF holds more than 10% of the Company’s outstanding shares on
an undiluted basis.
Related Party Transaction
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 CLF’s shareholdings being in excess
of 10% of the Company’s issued and outstanding share capital.
Accordingly, the completion of the Private Placement and the
entering into of the Amended CLF Promissory Note each constitute a
“related party transaction” under MI 61-101. The Transaction 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) as it relates to
the Private Placement and the amendment to make the Amended CLF
Promissory Note non-convertible and Subsection 5.7(1)(f) as it
relates to the increase in availability under the Amended CLF
Promissory Note.
United States Securities
Legislation
In accordance with United States securities
legislation, the Subject Shares are 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 Subject Shares were issued.
Concurrently, in accordance with applicable Canadian securities
legislation, the Subject Shares are subject to a statutory hold
period of four months plus a day from the date the Subject Shares
were issued.
This news release does not constitute an offer
of securities for sale in the US. The securities issued have not
been, nor will they be, registered under the United States
Securities Act of 1933, as amended, and such securities may not be
offered or sold within the US absent US registration or an
applicable exemption from US registration requirements. Hedging
transactions involving the Subject Shares may not be conducted
unless in compliance with the United States Securities Act of 1933,
as amended.
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.
Forward looking information in this news release includes, but is
not limited to, statements with respect to the intended use of
proceeds. 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
Itafos (TSXV:IFOS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Itafos (TSXV:IFOS)
Historical Stock Chart
From Apr 2023 to Apr 2024