Feronia Inc. announces secured convertible debenture financing of up to US$17.5 million

TWITTER
FACEBOOK
Feronia Inc. agents confiscating artworks produced by children of plantation workers at the Institute for Human Activities in the DRC in 2013, before Feronia destroyed the Institute's headquarters and forced it to relocate. (Photo: IHA)
Marketwired | 5 November 2015

Feronia Inc. announces secured convertible debenture financing of up to US$17.5 million
 
/EINPresswire.com/ -- TORONTO, ONTARIO -- (Marketwired) -- 11/05/15 -- Feronia Inc. ("Feronia" or the "Company") (TSX VENTURE: FRN) is pleased to announce that the Board of Directors of Feronia has resolved to issue up to US$17.5 million by private placement (the "Offering") of secured convertible debentures (the "Debentures"). The terms of the Offering approved by the Board are substantially the same as those of the convertible debenture financing completed by Feronia in June and July of 2015. CDC Group plc ("CDC"), the UK Government's Development Finance Institution, has expressed its intention to lead the Offering with a minimum US$10 million investment.
 
It is expected that a first tranche of the Offering will close on or about November 6, 2015. Completion of the Offering is subject to the negotiation and execution of definitive documentation and approval of the TSXV. Feronia shall make a further announcement in the event that the material terms of the Offering change. There is no assurance that the Offering will be completed.
 
Proceeds from the Offering will be used for working capital purposes and, in particular, to provide expansion capital for the Company's subsidiaries in the Democratic Republic of the Congo. The proceeds are also anticipated to enable the Company to deliver better environmental and social standards for workers and the local population through improved community engagement and environmental practices, upgraded community facilities, such as greater access to clean drinking water, and better workers' housing and sanitation.
 
The Canadian dollar equivalent of the principal amount of the Debentures is convertible into common shares of the Company (each, a "Common Share") at a rate of Cdn.$0.25 per Common Share. If the Company does not complete an Amended Debt Financing (as such term to be defined in the Debentures) prior to December 31, 2015, the conversion price of the Debentures shall be reduced to Cdn.$0.14 per Common Share.
 
Interest on the Debentures shall be 12% per annum, compounded semi-annually, and shall accrue and be payable upon maturity, unless converted earlier. Upon conversion, the Canadian dollar equivalent of the accrued interest on the Debentures shall, subject to the approval of the TSXV, be convertible into Common Shares at a per share price equal to the greater of Cdn.$0.25 and the Discounted Market Price (as defined in the policies of the TSXV) at the time of conversion. If the Amended Debt Financing is not completed by December 31, 2015, the interest on the Debentures shall convert at a price equal to the greater of Cdn.$0.14 and the Discounted Market Price of the Common Shares at the time of conversion.
 
The Debentures will mature on January 22, 2016 and shall be converted or repaid. At any time prior to maturity, the Debentures may be converted at the option of the holder. The Debentures shall automatically convert in the event that the Company draws down on an Amended Debt Financing. The Debentures shall be secured by way of a pledge by the Company of the outstanding shares of its wholly-owned Cayman Islands subsidiary, Feronia CI Inc. In the event that the Debentures do not convert into Common Shares prior to the maturity date, there is no assurance that the Company will have sufficient funds to repay the Debentures upon maturity. In such event, unless the maturity date is extended, the holders of the Debentures shall have the right to enforce their security.
 
Pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the Offering constitutes a "related party transaction" as CDC is an insider of the Company. The Company will be relying on an exemption from the formal valuation and minority approval requirements. The Offering is subject to the approval of the TSXV and the Debentures and Common Shares issued pursuant to the Offering are subject to a statutory hold period of four-months and one day. 
Original source: Marketwired
TWITTER
FACEBOOK
TWITTER
FACEBOOK

Post a comment

Name

Email address (optional - if you want a reply)

Comment