Itafos Announces Amendment to Credit and Guaranty Agreement
ITAFOS ANNOUNCES AMENDMENT TO CREDIT AND GUARANTY AGREEMENT
TORONTO, ON – September 30, 2019 – Itafos (TSX VENTURE: IFOS) (the “ Company”)
announced today that it has executed an amendment (the “ Amendment”) to its secured term
credit facility (the “ Facility”). The purpose of the Amendment is to align financial covenant s
requiring the Company not to exceed certain ratios at the end of each quarter with the Company’s
business plan and to provide the Company with additional flexib ility to raise working capital
financings at Itafos Conda and Itafos Arraias.
“We are pleased to have the continued support of our lenders an d appreciate their collaboration
on this amendment, which provides us with the financial flexibility needed to support our strategic
initiatives,” said George Burdette, CFO of Itafos.
The key terms of the Amendment are as follows:
sculpted financial covenants c onsidering the Company’s business plan, including certain
new financial covenants related to Itafos Arraias’ EBITDA and capex;
additional flexibility to raise working capital financings at Itafos Conda and Itafos Arraias
subject to certain terms and conditions;
required capital raise by December 31, 2019 of lesser of US$40 million or 24.9% of Itafos’
market capitalization, inclusive of the US$15 million convertib le unsecured subordinated
debt funded by CL Fertilizers Holding LLC on September 11, 2019;
additional cash interest of 1% per annum for each quarter that the Company’s
Consolidated Leverage Ratio is equal to or greater than 4.00:1. 00 at the end of such
quarter beginning with the quarter ended September 30, 2019 and 2% per annum until
the required capital raise is completed beginning November 1, 2019;
increased principal balance of US$2.2 million;
reduced minimum cash requirements upon closing working capital financings at Itafos
Conda and/or Itafos Arraias; and
other terms and conditions cust omary for similar amendments.
Lenders to the Facility include funds managed by BlackRock 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 Amendment constitut es a “related party transaction”
under MI 61-101. The Amendment is exempt from (i) the formal va luation 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) and 5.7(1)(f).
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+”), superphosp horic acid (“SPA”),
merchant grade phosphoric acid (“MGA”) and specialty products i ncluding 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 excess sulfuric
acid located in Tocantins, Brazil;
Itafos Paris Hills – a high-grade phosphate mine project locat ed in Idaho, US;
Itafos Farim – a high-grade phosphate mine project located in Farim, Guinea-Bissau;
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 press
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