Itafos Announces Amended and Restated Credit and Guaranty Agreement
ITAFOS ANNOUNCES AMENDED AND RESTATED CREDIT AND GUARANTY
AGREEMENT
TORONTO, ON – December 31, 2019 – Itafos (TSX VENTURE: IFOS) (the “ Company”)
announced today that it has executed an amended and restated cr edit and guaranty agreement
(the “ A&R Credit Agreement ”). The A&R Credit Agreement replaces the existing credit and
guaranty agreement dated May 18, 2018, including prior amendmen ts, and further amends
certain terms to provide the Company with additional financial flexibility including deferring the
testing of financial covenants and reducing cash interest payable in 2020.
The key further amended terms of the A&R Credit Agreement are as follows:
delayed testing of financial covenants until September 30, 202 0 and re-sculpted financial
covenants thereafter considering the Company’s business plan;
reallocated interest of 12% per annum from 9% payable in cash and 3% payable in kind
to 5% payable in cash and 7% payable in kind until December 6, 2020 or certain conditions
have been met;
eliminated additional interest of 1% per annum payable in cash for each quarter that the
Company’s Consolidated Secured Leverage Ratio is equal to or greater than 4.00:1.00 at
the end of such quarter;
reduced minimum cash requirement from US$2.5 million to US$1.0 million; and
other terms and conditions customary for similar agreements.
In exchange for eliminating additional interest of 1% per annum payable in cash for each quarter
that the Company’s Consolidated Secured Leverage Ratio is equal to or greater than 4.00:1.00
at the end of such quarter, the Company intends to issue five m illion shares (the “ Shares”) to
lenders to the A&R Credit Agreement, subject to approval from the TSX Venture Exchange. Until
the issuance of the Shares is approved by the TSX Venture Excha nge and such Shares have
been issued to the lenders to the A&R Credit Agreement, the Com pany would be subject to
additional interest of 1.25% per annum payable in kind for each quarter that the Company’s
Consolidated Secured Leverage Ratio is equal to or greater than 4.00:1.00 at the end of such
quarter.
Lenders to the A&R Credit Agreement include funds managed by Bl ackRock and a syndicate of
other lenders including CL Fertilizers Holding LLC (“ CLF”). 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 its shareholding being in excess of 10% of the Company’s
issued and outstanding share capital. Accordingly, the A&R Cred it Agreement constitutes a
“related party transaction” under MI 61-101. The A&R Credit Agr eement is exempt from (i) the
formal valuation requirements under Section 5.4 of MI 61-101 pu rsuant to Subsection 5.5(b) of
MI 61-101; and (ii) the minority approval requirements under Se ction 5.6 of MI 61-101 pursuant
to Subsection 5.7(1)(a) and 5.7(1)(f).
In accordance with United States securities legislation, the Sh ares will be 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 f rom the date the Shares are
issued. Concurrently, in accordance with applicable Canadian se curities legislation, the Shares
will be subject to a statutory hold period of four months plus a day from the date the Shares are
issued.
About Itafos
The Company is a vertically integrated phosphate fertilizers and specialty products company with
an attractive portfolio of long-term strategic businesses and p rojects 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 fert ilizer business with
production and sales capacity of approximately 550kt per year o f 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 producti on 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 exc ess 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 locat ed 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 Jun in, 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”, “estim ate”, “expect”, “may”, “will”, “project”,
“should”, “would”, “believe”, “predict” and “potential” and sim ilar expressions are intended to
identify forward looking information. This information involves known and unknown risks,
uncertainties and other factors that may cause actual results o r events to differ materially from
those anticipated in such forward looking information. No assur ance can be given that this
information will prove to be correct and such forward looking i nformation 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 anticipa ted by such forward looking
information. Although the Company has attempted to identify imp ortant factors that could cause
actual results to differ materially from those contained in for ward-looking statements, there may
be other factors that cause results not to be as anticipated, e stimated or intended. Factors that
may cause actual results to differ materially from expected res ults 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 availabl e 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 PR OVIDER
(AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXC HANGE)
ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information, please contact:
Itafos Investor Relations
www.itafos.com