Itafos Announces US$165 Million Credit and Guaranty Agreement
ITAFOS ANNOUNCES US$165 MILLION CREDIT AND GUARANTY AGREEMENT
May 22, 2018 – Itafos (TSX VENTURE: IFOS) announced t oday that it has signed a definitive credit and
guaranty agreement (the Agreement) with a syndicate of lenders to provide a US$165 million secured
term loan facility to Itafos to fund working capital and other cash requirements of the Arraias Phosphate
Operations and the Conda Phosphate Operations, c ontinued implementation of the company’s business
development initiatives (including, but not limited to the Paris Hills Project an d the Farim Project) and
other general corporate purposes.
The Agreement has been entered into by Itafos, as the borrower, its wholly-owned subsidiaries, Itafos
Brazil Holdings, Itafos International Holdings Coope ratie UA, Itafos Ltd., Itafos II LP and Itafos Conda
Holdings, as the guarantors (collectively, the Guarantors), CL Fertilizers Holding LLC (formerly known as
Zaff LLC) ( CLF), funds managed by BlackRock Financial Management Inc. and its affiliates, and a
syndicate of other lenders, as the lenders (collectively, the Lenders), and Cortland Capital Market
Services LLC, as the administrative agent.
The key terms of the Agreement are:
Term of four years commencing on the closing with a bullet repayment schedule subject to
certain prepayment rights and requirements and applicable prepayment penalties.
Interest at a per annum rate of 10% commencing on the closing until 18 months following the
closing with 50% payable in cash and 50% payable in kind and 12% thereafter with 75% payable
in cash and 25% payable in kind.
Secured by Itafos’ direct and indirect interest in the Guarantors and other assets of Itafos and the
Guarantors.
Issuance of bonus shares to the Lender s in an aggregate amount of 2,750,000 (the Bonus
Shares) upon the closing.
Other terms, fees and cost reimbursements standard and customary for similar agreements.
The closing of the Agreement is subject to satisfaction of certain conditions including, among other things,
delivery and execution of security and other document s and receipt of the approval of the TSX Venture
Exchange (the TSXV).
Itafos currently has outstanding unsecured promissory notes (collectively, the Bridge Loans ) in the
aggregate principal amount of US$89,961,951, of which US$33,299,902 is owed to CLF. Pursuant to the
terms of the Agreement, upon the closing of the Agreement, the aggregate outstanding principal amount
of the Bridge Loans, together with all interest ac crued thereon, will be deemed to have been converted
into loans constituting part of the Agreement and/or pr epaid, in whole or in part. Upon such conversion
and/or prepayment, Itafos will be released from its obligations pursuant to the Bridge Loans.
The Bonus Shares will be subject to resale restrictio ns 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 shares were issued. The Bonus Shares are also subject to a statutory hold period of four months
plus a day from the date of issuance in accordance with applicable Canadian securities legislation and
TSXV requirements, which hold period will run concurrently with the above referenced one year restricted
period under US securities legislation.
CLF currently beneficially owns, or controls or dire cts, approximately 58.5% percent of the outstanding
common shares of Itafos. As a result of the participation of CLF in the Agreement, and the Bonus Shares
to be issued to CLF, the Agreement is considered to be a “related party transaction” 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 Itafos’ issued and outstanding share capital. The transaction
is exempt from (i) the formal valuation require ments under Section 5.4 of MI 61-101 pursuant to
Subsection 5.5(b) of MI 61-101; and (ii) the mi nority approval requirements under Section 5.6 of
MI 61-101 pursuant to eit her Subsection 5.7(1)(a). Upon issuance of the Bonus Shares, CLF would
beneficially own, or control or direct, 81,980,065 co mmon shares of Itafos, representing 57.7% of the
issued and outstanding shares (on an undiluted basis).
About Itafos
Itafos is a vertically integrated phosphate based fertilizer s and specialty produc ts company with an
attractive portfolio of long-term strategic assets located in key agricultural and fertilizer markets
worldwide. Itafos is managed by an experienced and diverse team with extensive operations, commercial
and financial expertise. Itafos owns and operates the Conda Phosphate Operations, a vertically
integrated phosphate business which produces approximately 540,000 tons per year of mono-ammonium
phosphate, super phosphoric acid, merchant grade phosphoric acid and specialty products located in
Idaho, United States and the Arraias Phosphate Operat ions, a vertically integrated phosphate business
which produces approximately 500,000 tons per year of single super phosphate located in Tocantins,
Brazil. Itafos’ development portfolio includes the Paris Hills Project, a high-grade phosphate mine project
located in Idaho, United States, the Farim Project, a high-grade phosphate mine project located in Farim,
Guinea Bissau, the Santana Project, a vertically integrated high-grade phosphate mine and fertilizer
production project located in Pará, Brazil, the Arax á Project, a high-grade rare earth elements, niobium
and phosphate mine project located in Minas Gerais, Brazil and the Mantaro Project, a high-grade
phosphate mine project located in Junin, Peru.
FORWARD LOOKING STATEMENTS
Certain information contained in this news release cons titutes forward looking information. All information
other than information of historical fact is forwar d 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 in tended to identify forward looking
information. This information involves known and un known 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 in formation will prove to be correct and such forward
looking information included in this news releas e should not be unduly relied upon. The forward looking
information provided in this news release is bas ed upon a number of material factors and assumptions,
including the intended use of funds from the Agreement, that Itafos will satisfy the conditions precedent to
the Agreement including the final acceptance by the TSXV of the Agreement.
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 antic ipated by such forward looking information. Although
Itafos has attempted to identify importa nt factors that could cause actual results to differ materially from
those contained in forward-looking statements, there may be other factors that c ause results not to be as
anticipated, estimated or intended. Factors that may cause actual results to differ materially from
expected results described in forwar d-looking statements include, but ar e not limited to those risk factors
set out in Itafos’ Management Discussion and Analysis and other disclosure documents available under
its profile at www.sedar.com. Readers are cautioned that the forego ing list of risks, uncertainties and
assumptions are not exhaustive. The forward lookin g 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
About The Blueshirt Group
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FOR FURTHER INFORMATION, PLEASE CONTACT:
Itafos
Brian Zatarain, Chief Executive Officer
www.itafos.com
The Blueshirt Group
Gary Dvorchak, CFA
Managing Director
+1 (323) 240-5796