Nemaska Lithium Announces Pricing and Closing of Books on USD 350M Bond Offering
NOT FOR DISTRIBUTION TO NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
QUEBEC CITY, Quebec, May 10, 2018 (GLOBE NEWSWIRE) -- Nemaska Lithium Inc. (“Nemaska Lithium” or the “Corporation”) (TSX:NMX) (OTCQX:NMKEF)
(FRANCFORT:N0T) is pleased to announce that it has priced and closed the books on its offering (the "Bond Offering") of senior secured callable bonds in the aggregate principal
amount of USD 350M (the "Bonds"). Clarksons Platou Securities and Pareto Securities, acted as joint lead managers for the Bond Offering.
The Bonds are USD-denominated with a five-year term, unless earlier repurchased or redeemed, and bear interest at a rate of 11.25% per annum, payable quarterly and in arrears on the relevant interest payment day in February, May, August and November of each year, commencing on August 30, 2018.
The Bonds will be senior debt of the Corporation and guaranteed by Nemaska Lithium Whabouchi Mine Inc. (“NMX Whabouchi”) and Nemaska Lithium Shawinigan Transformation Inc. (“NMX Shawinigan”), each a wholly-owned subsidiary of the Corporation. Subject to certain exceptions, the Bonds will be secured on a first priority basis over all material assets (tangible and intangible) of the Corporation, NMX Whabouchi and NMX Shawinigan, and will also be secured by a second ranking pledge of the shares of Nemaska Lithium P1P Inc., another wholly-owned subsidiary of the Corporation.
The Bonds will be repaid based on a 24-month amortization schedule in respect of 50% of the aggregate principal amount of the Bonds, commencing on the date that is 36 months following the Settlement Date. In addition, the Corporation may, at its option, redeem the Bonds in whole or in part at stated redemption prices which are dependent on the applicable redemption date.
The proceeds of the Bond Offering will, upon disbursement to the Corporation, be used for the payment of capital expenditures, operating expense and financing costs associated with the development of the Corporation’s Whabouchi mine and Shawinigan plant (together, the “Project”).
The settlement date of the Bond Offering is expected to be on or about May 30, 2018 (the “Settlement Date”). Upon satisfaction of certain conditions precedent customary for these types of transactions, the net proceeds of the Bond Offering will be placed into a USD escrow account (the “Trust Account”). These conditions precedent include, but are not limited to, funding of the Trust Account by the Corporation such that upon deposit into the Trust Account of the net proceeds of the Bond Offering, the aggregate sum held on deposit therein (the “Bond Funds”) will equal 100% of the aggregate principal amount of the Bonds plus 3 months’ interest.
The Trust Account will be pledged in favour of the Bondholders and the initial drawdown, as well as subsequent drawdowns, of the Bond Funds by the Corporation from the Trust Account to prescribed operating expense accounts will be subject to conditions precedent customary for these types of transactions. The conditions precedent for the initial drawdown of the Bond Funds include, but are not limited to, the following:
(a) the Corporation having raised minimum net proceeds from equity offerings of USD 299 million;
(b) the Corporation having received the proceeds from the streaming facility of USD 150 million (the “Stream Facility”);
(c) subject to provision for a cost overrun account, the proceeds from the aforementioned equity offerings and Stream Facility having been spent in accordance with the stipulated uses of the Corporation’s operating expense account;
(d) the Corporation having executed offtake contracts with arm’s length parties for a minimum amount of spodumene concentrate over a specified period of time;
(e) the Corporation having either (i) executed amendment agreements to its existing offtake agreements or (ii) entered into alternate offtake agreements for lithium carbonate and/or lithium hydroxide, which alternate offtake agreements must satisfy prescribed conditions;
(f) the Corporation having executed and/or obtained relevant material project documents, agreements and governmental, regulatory and environmental permits and authorizations related to the Project;
(g) the Corporation having provided satisfactory evidence that the right of the Société de développement de Shawinigan Inc. to resolve (cancel) the sale of the Shawinigan site to NMX Shawinigan has been extinguished;
(h) the mining rights of the Corporation and NMX Whabouchi being in good standing;
(i) the intercreditor agreement in respect of the Stream Facility and certain other intercreditor agreements in respect of additional senior secured obligations as permitted under the terms of the Bonds (the “Bond Terms”) having been executed; and
(j) the security package over all of the assets to be charged in connection with the Bond Offering, and any other senior secured obligations as contemplated in connection therewith, having been executed and rendered opposable to third parties.