Itafos Announces Debt Refinancing Extending Maturity and Reducing Cost of Debt
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ITAFOS ANNOUNCES DEBT REFINANCING
EXTENDING MATURITY AND REDUCING COST OF DEBT
HOUSTON, TX – September 22, 2022 – Itafos Inc. (TSXV: IFOS) (“ Itafos” or the “Company”)
announced today that it has ente red into credit facilities (the “Credit Facilities”) with a syndicate
of lenders led by RBC Capital Markets, as sole bookrunner and sole lead arranger, pursuant to
which the lenders have advanced an US$85 million term loan (the “Term Loan”) to the Company
and made available a US$35 million letter of credit facility (the “ LC Facility”) and an US$80
million asset-based revolving credit facility (the “ABL Facility”). Together, the new Credit Facilities
will provide Itafos with enhanced financial flexibility, a non-dilutive source of capital as well as the
ability to refinance its existing debt.
“The refinancing announced today represents th e achievement of another important strategic
milestone for the Company. The new debt fa cilities will improve the company’s financial
performance because of the significantly reduced interest rates and creates more flexibility for
funding of the long-term growth of the business,” said G. David Delaney, Chief Executive Officer
of Itafos.
The key terms of the Term Loan and LC Facility are set out below:
The Term Loan is secured by the assets of the Company and its US subsidiaries and will
mature on September 22, 2025.
Interest shall accrue on outstanding borrowings at a rate equal to Term SOFR plus a margin
ranging from 4.25% to 5.25% per annum based upon the total net leverage ratio of the
Company and its subsidiaries. The initial borrowings are at a rate of 4.25%.
The Term Loan requires quarterly amorti zation payments and the Company may make
incremental prepayments of the term loan borrowings without penalty or premium.
The key terms of the ABL Facility are set out below:
The ABL Facility will mature on September 22, 2025. It is secured by the assets of the
Company and its US subsidia ries and guaranteed by ce rtain of the Company’s US
subsidiaries.
Interest shall accrue on outstanding borrowings at a rate equal to Term SOFR plus a margin
ranging from 2.25% to 2.75% per annum, bas ed upon the average excess availability
under the ABL Facility.
The Term Loan, LC Facility and ABL Facility are subject to customary conditions precedent,
representations and warranties, financial and other covenants, and events of default.
The proceeds of the Term Loan and ABL Facility will be used to refinance the Company’s
indebtedness under the existing term loan from Oaktree Capital Management, L.P., which carried
an interest rate of 8.25% per annum + LIBOR, the Company’s existing revolving credit agreement
from JPMorgan Chase Bank, N.A., an d under the promissory note issued to CL Fertilizers Holding
LLC, which had an interest rate of 18% per a nnum that was payable in kind. The refinancing
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provides for the retiring of all related party debt. Proceeds from the ABL facility will also be used
for working capital and general corporate purposes.
Upon closing the refinancing, the Term Loan w ill have an outstanding balance of US$85.0 million,
the ABL Facility will have an outstanding balan ce of US$65.0 million, and US$32.8 million will be
outstanding under the LC Facility.
About Itafos
The Company is a phosphate and specialty fertilizer company. The Company’s businesses and
projects are as follows:
Conda – a vertically integrated phosphate fe rtilizer business located in Idaho, US with
production capacity as follows:
- approximately 550kt per year of monoammo nium phosphate (“MAP”), MAP with
micronutrients (“MAP+”), superphosphoric acid (“SPA”), merchant grade phosphoric
acid (“MGA”) and ammonium polyphosphate (“APP”); and
- approximately 27kt per year of hydrofluorosilicic acid (“HFSA”);
Arraias – a vertically integrated phosphate fe rtilizer business located in Tocantins, Brazil
with production capacity as follows:
- approximately 500kt per year of single superphosphate (“SSP”) and SSP with
micronutrients (“SSP+”); and
- approximately 40kt per year of excess sulfuric acid (220kt per year gross sulfuric
acid production capacity);
Farim – a high-grade phosphate mine project located in Farim, Guinea-Bissau;
Santana – a vertically integrated high-grade phosphate mine and fertilizer plant project
located in Pará, Brazil; and
Araxá – a vertically integrated rare earth elements and niobium mine and extraction plant
project located in Minas Gerais, Brazil.
In addition to the businesses and projects desc ribed above, the Company also owns Paris Hills
(Idaho, US) and Mantaro (Junin, Peru), which are ph osphate mine projects that are in process of
being wound down.
The Company is a Delaware corporation that is headquartered in Houston, TX. The Company’s
shares trade on the TSX Venture Exchange (“TSX-V”) under the ticker symbol “IFOS”. The Company’s
principal shareholder is CL Fertilizers Holding LLC (“CLF”). CLF is an affiliate of Castlelake, L.P., a
global private investment firm.
For more information, or to join the Company’s mailing list to receive notification of future news
releases, please visit the Company’s website at www.itafos.com.
Forward-Looking Information
Certain information contained in this news release constitutes forward-looking information, including
statements with respect to the use of proceeds from the Term Loan and ABL Facility and the potential
impact of the transactions on the Company’s fina ncial performance. All information other than
information of historical fact is forward-looking information. The use of any of the words “intend”,
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“anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should”, “would”,
“believe”, “predict” and “potential” and similar expressions are intended to identify forward-
looking information. This information involves kn own 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 includ ed 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 im portant 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, esti mated or intended. Factors that may cause actual
results to differ materially from expected results de scribed in forward-looking statements include,
but are not limited to, those risk factors set out in the Company’s annual information form and other
disclosure documents available under the Compan y’s profile on SEDAR at www.sedar.com and on
the Company’s website at www.itafos.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. The Company undertakes no obligat ion to publicly update or revise any forward-
looking information except as required by applicable securities laws.
NEITHER THE TSX-V NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE
POLICIES OF THE TSX-V) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS
NEWS RELEASE.
For further information, please contact:
Itafos Investor Relations
www.itafos.com