Itafos Announces Intent to Borrow Convertible Unsecured Subordinated Debt IN the Amount of US$15,000,000
ITAFOS ANNOUNCES INTENT TO BORROW CONVERTIBLE UNSECURED
SUBORDINATED DEBT IN THE AMOUNT OF US$15,000,000
TORONTO, ON – September 10, 2019 – Itafos (TSX VENTURE: IFOS) (the “ Company”)
announced today that it intends to borrow US$15,000,000 from CL Fertilizers Holding LLC (“CLF”)
in the form of convertible unsecured subordinated debt, subject to approval from the TSX Venture
Exchange. The debt would be evidenced by an unsecured and subor dinated promissory note
issued by the Company in favor of CLF in the principal amount o f US$15,000,000 (the “ CLF
Promissory Note”).
The proposed CLF Promissory Note would be subordinate to the Company’s existing senior credit
facility and subject to the terms of subordination incorporated thereunder. The CLF Promissory
Note contemplates an interest rate of 15% per year and would be payable on demand no earlier
than six months after the date on which the Company’s existing senior credit facility is paid in full.
The interest would be added to and increase the outstanding pri ncipal balance of the CLF
Promissory Note on a quarterly basis. The proceeds of the CLF Promissory Note are expected to
be used to fund the general working capital and capital expendi ture needs of the Company and
its subsidiaries. The outstanding principal and interest under the CLF Promissory Note would
automatically convert into shares of the Company in connection with any future equity issuances
through which the Company raises US$7,500,000 or more in cash (an “Equity Issuance”).
Upon an Equity Issuance, the outstanding principal amount of the CLF Promissory Note would be
converted into the number of shares of the Company equal to the greater of (a) the volume-
weighted average price of each share received by the Company in connection with such Equity
Issuance and (b) the market price of the shares of the Company as of the date of the CLF
Promissory Note. Also upon an Equity Issuance, the accrued and unpaid interest owing on the
CLF Promissory Note as of the date of such Equity Issuance would be converted into the number
of shares of the Company equal to the greater of (a) the volume -weighted average price of each
share received by the Company in connection with such Equity Issuance and (b) the market price
of the shares of the Company as of the date of such Equity Issuance.
CLF is a “related party” to the Company under Multilateral Inst rument 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
issuance by the Company to CLF of the CLF Promissory Note const itutes a “related party
transaction” under MI 61-101. The issuance of the CLF Promissory Note by the Company to CLF
is exempt from (i) the formal valuation requirements under Sect ion 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).
About Itafos
Itafos is a vertically integrated phosphate fertilizers and spe cialty products company with an
attractive portfolio of long-term strategic businesses and projects located in key fertilizer markets
worldwide. Itafos is managed by an experienced and diverse team with extensive operations,
commercial and financial expertise. Itafos owns and operates Itafos Conda, a vertically integrated
phosphate fertilizer business with production and sales capacity of approximately 550kt per year
of monoammonium phosphate (“ MAP”), superphosphoric acid (“ SPA”), merchant grade
phosphoric acid (“ MGA”) and specialty products including ammonium polyphosphate (“ APP”)
located in Idaho, US and Itafos Arraias, a phosphate fertilizer business with production and sales
capacity of approximately 500kt per year of single superphospha te (“ SSP”), SSP with
micronutrients (“SSP+”), premium PK compounds and excess sulfuric acid located in Tocantins,
Brazil. Itafos owns and is developing Itafos Paris Hills, a hig h-grade phosphate mine project
located in Idaho, US, Itafos Farim, a high-grade phosphate mine project located in Farim, Guinea-
Bissau, Itafos Santana, a vertically integrated high-grade phos phate mine and fertilizer plant
project located in Pará, Brazil, Itafos Mantaro, a large phosph ate 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 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