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Gensource gets commitments for C$280 million facility in two tranches
By Marisa Wong
Los Angeles, Sept. 23 – Gensource Potash Corp. said it received commitment letters from its two mandated joint lead debt arrangers, KfW IPEX-Bank and Societe Generale, to provide a senior secured debt facility totaling up to C$280 million.
The lead arrangers have each underwritten 50% of the debt facility, or C$140 million each.
The facility comprises two tranches:
• Tranche A C$140 million fully amortizing term loan facility to be supported by credit insurance issued by Euler Hermes AG, the Federal Republic of Germany Export Credit Agency with a term of 11.5 years; and
• Tranche B C$140 million fully amortizing term loan facility with a term of 10.5 years.
Interest for both tranches is based on CDOR and an applicable margin.
The debt facility is intended to fund, in part, the construction and ramp up of the company’s Tugaske potash development project.
As previously announced, a special purpose vehicle has been incorporated in Saskatchewan for the Tugaske project and named KClean Potash Corp. KClean is the legal entity that will finance and ultimately construct and own the Tugaske project. As the project’s offtaker, HELM AG from Germany has committed to invest C$50 million to own 33% of KClean. Gensource is anticipated to own the remaining 67% through paid-in-capital and an equity investment in KClean.
Execution of loan documentation is subject to completion of the remaining equity financing by Gensource, Euler Hermes approval and other customary conditions.
Gensource is a Saskatoon, Sask.-based fertilizer development company focused on sustainable potash production.
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