TIDMSO4
RNS Number : 3191I
Salt Lake Potash Limited
11 December 2020
11 December 2020 AIM/ASX Code: SO4
SALT LAKE POTASH LIMITED
-------------------------
Institutional Placement to achieve Financial Close
Salt Lake Potash Limited ( SO4 or the Company ) is pleased to
announce that it has received binding commitments for a successful
share placement to institutional shareholders and other investors
to raise up to A$52.0 million to enable first drawdown of US$105
million under the Taurus/CEFC US$138 million Syndicated Facility
Agreement in December 2020.
Equity Placement
-- The Company has received binding commitments from
institutional shareholders, sophisticated investors and directors
to subscribe for 130 million new ordinary shares at A$0.40 each to
raise up to A$52m (before costs) (Placement), including 5 million
shares to directors subject to shareholder approval.
Debt Financial Close and first draw
-- As announced on 5 August 2020, the Company has executed the
US$138m Syndicated Facility Agreement (SFA) with Taurus Mining
Finance Fund No.2 L.P (Taurus) and the Clean Energy Finance
Corporation (CEFC). The lending group has confirmed all conditions
precedent to first drawdown under the SFA have been either
satisfied or waived, save for the completion of an equity raise of
at least A$30m, a transfer of US$8m into the Debt Service Reserve
Account, payment of transaction fees and repayment of the existing
US$45m bridge loan (Remaining Conditions). The completion of
Tranche 1 of the Placement (as described below) will result in each
of the Remaining Conditions being satisfied, with the first US$105m
tranche of the SFA to then be drawn down in December 2020.
Share Purchase Plan
-- The Company plans to undertake a non-underwritten Share
Purchase Plan (SPP) to raise up to a further A$5 million from
eligible shareholders at an issue price of A$0.40 per new
share.
Uses of capital raising proceeds
-- The proceeds from the Placement and SPP will be used to cash
back a bank guarantee for the APA gas pipeline (A$18m), cover
variations to ramp up vs. bank model (A$15m), to offset recent AUD
strength (A$10m), transaction fees (A$2m) and up to A$12m for
additional working capital.
Lake Way construction on schedule & budget
-- The Lake Way Project remains on track for first sulphate of
potash (SOP) production in March 2021 and first SOP sales in April,
with the project capital budget unchanged at A$264m.
TONY SWIERICZUK, Chief Executive Officer
"SO4 is pleased to have completed this placement of up to A$52m
to enable financial close on the US$138m Taurus/CEFC debt facility.
In combination, these funds will ensure the Company is well
financed to deliver the Lake Way Project. I would like to extend my
sincere thanks to our shareholders for their continued support of
the project, our Company and the development of a new export
industry for Australia."
Debt Financial Close and First Draw
As announced on 5 August 2020, SO4 has executed the US$138m SFA
with Taurus and CEFC, with the first US$105m expected to be drawn
in December 2020.
The lending group has now confirmed to the Company that all
conditions precedent to the first drawdown have been satisfied or
waived, save for:
-- Completion of equity raise of at least A$30m (net) - expected
to be satisfied by Tranche 1 of the Placement (as described
below);
-- US$8m moved into Debt Service Reserve Account - to be
completed following the completion of Tranche 1 of the
Placement;
-- The payment of transaction fees; and
-- Repayment of the US$45m Bridge - to be funded from the first drawdown under the SFA.
The balance of the debt is expected to be drawn down in Q2'21
subject to market standard conditions. The material terms of the
SFA remain unchanged and are summarised in Table 1 below.
Table 1: Syndicated Facility Agreement Key Terms
Facility Amount US$138m (Taurus US$91m, CEFC US$47m)
Tenor 4 Years (30 September 2024)
Availability Period Financial close until 30 June 2021
Interest rate 9.0% per annum payable quarterly on
drawn funds
Upfront Fee 2.75% (paid)
Undrawn Commitment fee 2.5% per annum
Tranches Bridge: US$45m currently drawn
SFA: US$138m (including Bridge repayment)
Amortisation/Repayment No scheduled repayments or debt amortisation
until 31 March 2022 (approximately
12 months after first production) with
scheduled repayment profile commencing
at 2.0% of Principal
Additional cash sweep of 70% of surplus
cash available for debt service accelerating
SO4's deleveraging
Debt Service Reserve Account US$8m prior to project completion,
thereafter greater of US$8m and principal
and interest payable in next 6 months
Bullet US$92m (67%) at 31 December 2024 (less
early repayments)
Refinancing Restrictions Nil 18 months after signing
----------------------------- ----------------------------------------------
Equity financing
SO4 is raising up to A$57 million in equity financing including
a placement of up to A$52 million and a Share Purchase Plan to be
offered to eligible shareholders for up to A$5 million, at A$0.40
per new share in order to satisfy the remaining conditions
precedent and achieve financial close on the SFA, and to be used as
follows:
-- A$15m to cover variations to ramp up vs. bank model;
-- A$18m to cash back bank guarantee for APA gas pipeline;
-- A$10m due to recent AUD strength (spot 0.743 vs. 0.68 in the BFS);
-- A$2m financing transaction fees; and
-- Up to a further A$12m for additional working capital.
Placement details
The Company has received firm commitments to raise gross
proceeds of A$50 million via a private placement to sophisticated,
professional and institutional investors. The private placement
will comprise the issue of up to 125 million new fully paid
ordinary shares (Placement Shares) at an issue price of A$0.40 per
share (Placement).
In addition, SO4 Directors have committed to subscribe for up to
5.0 million Placement Shares, including 3.0 million shares by
Chairman, Mr Ian Middlemas and 0.5 million shares by Managing
Director and CEO, Mr Tony Swiericzuk, subject to shareholder
approval. If approved by shareholders, this would raise an
additional A$2 million
The Placement is comprised of two tranches:
-- Tranche 1, comprising the issue of 66,593,631 Placement
Shares under Listing Rule 7.1, and 58,406,369 Placement Shares
under Listing Rule 7.1A. The Tranche 1 Placement Shares are
expected to be issued on or around 18 December 2020
-- Tranche 2, comprising the issue of 5,025,000 Placement Shares
to Directors, subject to the receipt of prior approval of the
Company's shareholders. A general meeting to seek the requisite
approval will be convened shortly, with the meeting expected to be
held in late January 2021.
The issue price of A$0.40 per share represented a 16.7% discount
to the last traded share price on ASX of A$0.48 and 21% to the
5-day volume weighted average share price on ASX of A$0.51.
Euroz Hartleys Securities Limited and Canaccord Genuity Group
Inc. were appointed as joint lead managers and bookrunners to the
Placement. Cenkos Securities plc acted as Co-manager.
Related Party transactions
The proposed participation in the Placement by Mr Ian Middlemas
(3.0m shares), Mr Tony Swiericzuk (0.5m shares), Mr Philip
Montgomery (1.25m shares), Mr Matthew Bungey (150,000 shares), Mr
Peter Thomas (125,000 shares), and the subscription for 13.75m
shares in the Placement by Lombard Odier Asset Management (Europe)
Limited, a substantial shareholder in the Company, constitute
related party transactions under Rule 13 of the AIM Rules for
Companies. The independent director, Mr Bryn Jones, having
consulted with the Company's nominated adviser, Grant Thornton UK
LLP, considers that the terms of the transactions are fair and
reasonable insofar as the Company's shareholders are concerned.
Settlement and dealings
Application will be made to the AIM Market of the London Stock
Exchange ("AIM") for 125,000,000 Ordinary Shares, pursuant to the
Placement, which rank pari passu with the Company's existing issued
Ordinary Shares, to be admitted to trading. Dealings on AIM are
expected to commence at 8:00am on or around 18 December 2020
(Admission).
Total Voting Rights
For the purposes of the Financial Conduct Authority's Disclosure
Guidance and Transparency Rules (DTRs), following Admission of the
first tranche of shares, SO4 will have 710,312,487 Ordinary Shares
on issue with voting rights attached. SO4 holds no shares in
treasury. This figure of 710,312,487 may be used by shareholders in
the Company as the denominator for the calculations by which they
will determine if they are required to notify their interest in, or
a change to their interest in the Company, under the ASX Listing
Rules or the DTRs.
Share Purchase Plan
The Company plans to undertake a non-underwritten SPP to raise
up to A$5 million (before costs) via the issue of shares at an
issue price of A$0.40 per new share.
The SPP will enable existing eligible shareholders and
depositary interest holders, irrespective of the size of their
holding, to participate in the capital raising at the same issue
price as the Placement, and not incur any brokerage or transaction
costs.
Eligible shareholders, being those holders of shares with an
address in Australia, New Zealand or the United Kingdom as at
1.00pm (AEDT) on 10 December 2020, will have the opportunity to
apply for up to A$30,000 worth of new shares in the Company. The
shares issued under the SPP will rank equally with existing
ordinary shares of the Company.
Eligible depositary interest holders, being those holders of
depositary interests with an address in Australia, New Zealand or
the United Kingdom as at 10 December 2020, will have the
opportunity to apply for the GBP equivalent of up to A$30,000 worth
of new shares in the Company. The depositary interests issued under
the SPP will rank equally with existing depositary interests of the
Company.
At this stage, the maximum gross amount raised under the SPP
will be capped at a total of A$5 million. Should participation in
the SPP be scaled back, each applicant's allocation will be scaled
back in accordance with the policy to be described in the terms and
conditions of the SPP. The terms and conditions of the SPP will be
contained in an offer document and application form which will be
made available to eligible shareholders and lodged on the ASX on 18
December 2020. A letter will be made available to eligible
depositary interest holders on or about 18 December 2020.
The shares proposed to be issued under the SPP will be issued
pursuant to the Company's placement capacity under Listing Rule
7.1.
Table 2: Indicative Timetable
Event Date
================================================ ============================
Record date for Share Purchase Plan Thursday, 10 December 2020
(SPP)
============================
Announcement of Placement and SPP and Friday, 11 December 2020
suspension lifted
============================
Settlement of Tranche 1 Placement Shares Thursday, 17 December 2020
============================
Allotment, quotation and trading of Friday, 18 December 2020
Tranche 1 Placement Shares
============================
SPP offer document and application Friday, 18 December 2020
forms made available to eligible shareholders,
SPP letter made available to depositary
interest holders
SPP opening date
============================
Closing date for eligible depositary Thursday, 28 January 2021
interest holders to participate in
SPP
============================
General Meeting to approve the issue Friday, 29 January 2021
of the Tranche 2 Placement Shares
============================
Closing date for eligible shareholders Friday, 29 January 2021
to participate in SPP
============================
Announcement of results of SPP Wednesday, 3 February 2021
============================
Settlement of Tranche 2 Placement Shares Thursday, 4 February 2021
============================
Allotment, quotation and trading of Friday, 5 February 2021
Tranche 2 Placement Shares
============================
Issue of SPP Shares Tuesday, 9 February 2021
============================
Commencement of trading of SPP Shares Wednesday, 10 February 2021
============================
The above dates are indicative only and are subject to change,
subject to compliance with the ASX Listing Rules and Corporations
Act.
In particular, the Company may close the SPP offer early,
depending on demand. Accordingly, eligible shareholders who wish to
participate are encouraged to apply as soon as possible after the
offer opens.
Lake Way Project construction on schedule & budget
The Lake Way Project remains on schedule for first SOP
production in March 2021 and first SOP sales in April 2021. The
project capital budget remains unchanged at A$264m and the overall
project was 77% complete on a value earned basis as at 30 November
2020.
Key project workstreams continue to progress with engineering
now 99% complete, plant and non-process infrastructure contract
awards 99% committed, structural steel 65% complete and the APA gas
pipeline now 25% complete.
In November 2020 the Company commenced harvesting first plant
feed salts from the Train 1 pond network in preparation for plant
commissioning, which is expected to commence in February 2021.
Presentation
The Company has also released a presentation on ASX which is
available for download at
https://www.so4.com.au/company-presentations/
Voluntary Suspension on ASX
The voluntary suspension of the Company's shares on ASX was
lifted prior to the opening of trade on 11 August 2020, following
an announcement to the ASX market regarding the above.
For further information please visit www.so4.com.au or
contact:
Tony Swiericzuk / Richard Knights Salt Lake Potash Limited Tel: +61 8 6559 5800
Colin Aaronson / Seamus Fricker Grant Thornton UK LLP (Nominated Adviser) Tel: +44 (0) 20 7383 5100
Derrick Lee / Peter Lynch Cenkos Securities plc (Joint Broker) Tel: +44 (0) 131 220 6939
Rupert Fane / Ernest Bell Hannam & Partners (Joint Broker) Tel: +44 (0) 20 7907 8500
This announcement has been authorised for release by the Board
of Directors.
Additional Disclosures
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Key Risks
Refer to pages 25 to 29 (inclusive) of the Presentation released
to ASX on 11 December 2020 and available for download
https://www.so4.com.au/company-presentations/
Selling Restrictions
This announcement is for information purposes only and shall not
constitute an offer to sell or issue or the solicitation of an
offer to buy, subscribe for or otherwise acquire any new shares of
the Company in any jurisdiction in which any such offer or
solicitation would be unlawful.
Refer to pages 30 to 32 (inclusive) of the Presentation released
to ASX on 11 December 2020 and available for download
https://www.so4.com.au/company-presentations/
Forward Looking Statements
This announcement includes forward-looking statements. These
forward-looking statements are based on the Company's expectations
and beliefs concerning future events. Forward-looking statements
are necessarily subject to risks, uncertainties and other factors,
many of which are outside the control of the Company, which could
cause actual results to differ materially from such statements.
Although the Company believes that its forward-looking statements
have reasonable grounds, can give no assurance that they will be
achieved. They may be affected by a variety of variables and
changes in underlying assumptions that are subject to risk factors
associated with the nature of the Company's business (including
those described in pages 25 to 29 (inclusive) of the Presentation
released to ASX on 11 December 2020), which cause actual results to
differ materially from those expressed herein. The Company makes no
undertaking to subsequently update or revise the forward-looking
statements made in this announcement, save where required by law or
regulation, to reflect the circumstances or events after the date
of this announcement.
Not for release to US wire services or distribution in the
United States
This announcement has been prepared for publication in Australia
and may not be released to US wire services or distributed in the
United States. This announcement does not constitute an offer to
sell, or a solicitation of an offer to buy, securities in the
United States or any other jurisdiction. Any securities described
in this announcement have not been, and will not be, registered
under the US Securities Act of 1933 and may not be offered or sold
in the United States except in transactions exempt from, or not
subject to, the registration requirements of the US Securities Act
and applicable US state securities laws.
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END
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(END) Dow Jones Newswires
December 11, 2020 02:00 ET (07:00 GMT)
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