MBAC Announces Recapitalization Transaction

TORONTO, ON--(Marketwired - April 05, 2016) - MBAC Fertilizer Corp. ("MBAC" or the "Company") (TSX: MBC) today announced that it has entered into a support agreement (the "Support Agreement") with Zaff LLC ("Zaff"), the investment fund active in the fertilizer industry which has previously provided bridge financing to the Company, to give effect to a recapitalization of the Company (the "Recapitalization").

The Recapitalization has been approved by the Board of Directors of the Company (the "Board"). In doing so, the Board has determined that the Recapitalization offers substantial benefits to the Company and is in the best interest of the Company and its stakeholders. Among other things, upon implementation, the Recapitalization is expected to result in a significant reduction of debt and increased financial flexibility.

An extensive review process by the Company has shown that the Recapitalization is the best and only available alternative for the Company at this time that preserves value for the shareholders of MBAC and for the creditors of MBAC that do not also have claims against MBAC's subsidiaries. 

Anthony Cina, Chairman of the Special Committee to the Board stated "This Recapitalization represents a significant step in the Company's recovery from unsustainable financial distress. Upon completion of the Recapitalization, the Company will emerge with a substantially restructured and unlevered balance sheet and the beginnings of a global diversified phosphate platform. Throughout the strategic process, we diligently endeavoured to rescue and maximize any residual shareholder value, while protecting the interests of creditors and other stakeholders alike, including those of our employees, who are important partners in the future of Itafos. The Recapitalization will put MBAC in a position to pursue the next phase of our strategic plan, which is to finance and develop a global integrated phosphate producer. We are delighted to have forged a partnership with Zaff, who early on in the process appreciated the interests of MBAC shareholders, creditors and stakeholders. We aligned our interests early on, and, all considered, were able to deliver a workable solution to a very difficult situation. We are exceptionally pleased with this outcome."