Itafos Announces Debt Refinancing Extending Maturity and Reducing Cost of Debt

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 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 the achievement of another important strategic milestone for the Company. The new debt facilities 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 amortization 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 subsidiaries and guaranteed by certain 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, based 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., and under the promissory note issued to CL Fertilizers Holding LLC, which had an interest rate of 18% per annum that was payable in kind. The refinancing 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 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 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 fertilizer business located in Idaho, US with production capacity as follows:
  • approximately 550kt per year of monoammonium 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 fertilizer 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 described above, the Company also owns Paris Hills (Idaho, US) and Mantaro (Junin, Peru), which are phosphate 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 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 this information will prove to be correct and such forward-looking information 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 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 forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Factors that may cause actual results to differ materially from expected results described 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 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 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 obligation 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
investor@itafos.com
www.itafos.com