MBAC Announces Court Approval of Brazilian Restructuring Plan

TORONTO, ONTARIO--(Marketwired - Sept. 7, 2016) - MBAC Fertilizer Corp. (MBAC or the Company) announces that, further to its press release of August 4, 2016, the extrajudicial consolidated restructuring proceeding filed by Itafós Mineração S.A., MBAC Fertilizantes S.A. and MBAC Desenvolvimento S.A., each a wholly-owned subsidiary of MBAC, with the court of Arraias, State of Tocantins (the Brazilian Court) under applicable restructuring law in Brazil (the Brazil Restructuring Plan), was approved by the Brazilian Court on August 29, 2016.

The Brazil Restructuring Plan, which under the Brazilian Bankruptcy Law 11.101/2005 requires approval of creditors holding at least 60% of affected claims in order to be binding upon non signatory creditors, received approval of claimholders retaining in excess of 90% of the unsecured claims. As a result, the Brazil Restructuring Plan was confirmed by the Brazilian Court, and a total amount of R$760 million (ca. US$235 million) will be restructured, with creditors having the option of either receiving a cash upfront payment of up to R$15,000 (ca.US$ 4,700) or receiving 100% of their claims, being 10% in unsecured convertible debentures (the Debentures) of the Brazilian subsidiary against which the creditor's claim exists and the remaining 90% in warrants (Warrants), or 100% in Warrants as well. The Warrants will grant a creditor the right to purchase preferred shares (the Preferred Shares) issued by the Brazilian subsidiary against which such creditor holds its unsecured claim. The Debentures will grant to the creditors the right to receive either (i) cash yearly installments at an interest rate of 10% per annum, with a one year grace period for the first installment, over a 10 year period; or (ii) the right to convert the Debentures into Preferred Shares of the Brazilian subsidiary which issued the Debentures. Preferred Shares issued by the respective Brazilian subsidiary are convertible, at the option of the holder, into shares of MBAC and are redeemable by the Brazilian subsidiary that issued such Preferred Shares.

On August 4, 2016, the Company and its wholly-owned subsidiaries, MBAC Opportunities and Financing Inc., MBAC International Holdings Coöperatie U.A. and MBAC (Barbados) Inc., obtained an Initial Order from the Superior Court of Justice in Ontario under the Companies' Creditors Arrangement Act in connection with the implementation of a recapitalization transaction (the Recapitalization) pursuant to an amended and restated support agreement (the A&R Support Agreement) with Zaff LLC. Approval of the Brazil Restructuring Plan by the Brazilian Court is a condition to the implementation of the Recapitalization. The Brazil Restructuring Plan will only be implemented in combination and concurrently with the Recapitalization.