HOUSTON, Sept. 22, 2022 (GLOBE NEWSWIRE) — Itafos Inc. (TSXV: IFOS) (“Itafos“or the”Company”) announced today that it has entered 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 advanced a term loan of US$85 million (the “term loan”) to the Company and has made available a US$35 million letter of credit facility (the “LC installation“) and a US$80 million revolving credit facility (the “ABL installation”). Together, the new credit facilities will provide Itafos with increased financial flexibility, a non-dilutive source of capital as well as the ability to refinance its existing debt.
“The refinancing announced today represents the achievement of another important strategic step for the Company. The new credit facilities will improve the company’s financial performance due to significantly reduced interest rates and create more flexibility for financing the company’s long-term growth,” said G. David Delaney, President – managing director 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 U.S. subsidiaries and will mature on September 22, 2025.
Interest will accrue on outstanding borrowings at a rate equal to the term SOFR plus a margin ranging from 4.25% to 5.25% per annum based on the total net leverage ratio of the Company and its subsidiaries. . The initial borrowings are at the rate of 4.25%.
The term loan requires quarterly amortization payments and the Company can make progressive prepayments of the term loans without penalty or bonus.
The main terms of the ABL Facility are defined below:
The ABL facility will mature on September 22, 2025. It is secured by the assets of the Company and its US subsidiaries and guaranteed by certain US subsidiaries of the Company.
Interest will accrue on outstanding borrowings at a rate equal to the forward SOFR plus a margin ranging from 2.25% to 2.75% per annum, depending on the average excess availability under the ABL facility.
The Term Loan, the LC Facility and the ABL Facility are subject to customary conditions precedent, representations and warranties, financial and other covenants and events of default.
Proceeds from the term loan and ABL facility will be used to refinance the company’s debt under Oaktree Capital Management, LP’s existing term loan, which bore an interest rate of 8.25% per annum + LIBOR, the company’s existing revolving credit agreement with JPMorgan Chase Bank, NA, and under the promissory note issued to CL Fertilizers Holding LLC, which had an interest rate of 18% per annum payable in kind. The refinancing provides for the repayment of all related party debts. Proceeds from the ABL facility will also be used for working capital and general corporate purposes.
Upon closing of the refinancing, the Term Loan will have an outstanding balance of US$85.0 million, the ABL Facility will have an outstanding balance of US$65.0 million and US$32.8 million will be outstanding under of the LC facility.
The Company is a specialty phosphate and fertilizer business. The business lines and projects of the Company are as follows:
Conda – a vertically integrated phosphate fertilizer company located in Idaho, USA with production capacity as follows:
approximately 550 kt per year of monoammonium phosphate (“MAP”), MAP with micronutrients (“MAP+”), superphosphoric acid (“SPA”), market grade phosphoric acid (“MGA”) and polyphosphate of ammonium (“APP”); and
approximately 27 kt per year of hydrofluorosilicic acid (“HFSA”);
Arraias – a vertically integrated phosphate fertilizer company located in Tocantins, Brazil with production capacity as follows:
approximately 500 kt per year of simple superphosphate (“SSP”) and SSP with micronutrients (“SSP+”); and
approximately 40 kt per year of excess sulfuric acid (gross sulfuric acid production capacity of 220 kt per year);
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 element and niobium mining and plant project located in Minas Gerais, Brazil.
In addition to the businesses and projects described above, the Company also owns Paris Hills (Idaho, United States) and Mantaro (Junin, Peru), which are phosphate mining projects under liquidation.
The company is a Delaware corporation headquartered in Houston, TX. The Company’s shares trade on the TSX Venture Exchange (“TSX-V”) under the symbol “IFOS”. The principal shareholder of the Company is CL Fertilizers Holding LLC (“CLF”). CLF is a subsidiary of Castlelake, LP, a global private investment firm.
For more information or to join the Company’s mailing list to receive notification of future press releases, please visit the Company’s website at www.itafos.com.
Certain information contained in this press release constitutes forward-looking information, including statements regarding the use of proceeds from the Term Loan and the ABL Facility and the potential impact of the transactions on the Company’s financial performance. All information other than information of historical fact is forward-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 intended to identify forward-looking information. This information involves known 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 such information will prove to be accurate and undue reliance should not be placed on any forward-looking information included in this press release.
Forward-looking information is subject to a number of risks and other factors that could cause actual results and events to differ materially from those anticipated by such forward-looking information. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking statements, there may be other factors that cause results not to be those anticipated, estimated or expected. Factors that could cause actual results to differ materially from the expected results described in the forward-looking statements include, but are not limited to, the risk factors set forth in the Company’s Annual Information Form and other disclosure documents. information available under the Company’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 is not exhaustive. The forward-looking information included in this press release is expressly qualified by this cautionary statement and is made as of the date of this press release. The Company undertakes no obligation to publicly update or revise any forward-looking information, except as required by applicable securities laws.
NEITHER THE TSX-V NOR ITS REGULATION SERVICE PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX-V) ACCEPTS RESPONSIBILITY FOR THE RELEVANCE OR ACCURACY OF THIS RELEASE.
For more information, please contact:
Itafos Investor Relations