TVIRD signs US$29.9 million term loan facility
TVI Resource Development Philippines, Inc. (TVIRD) announced
today that the company and its Canadian affiliate, TVI Pacific Inc. (TSX: TVI),
have signed an Omnibus Loan and Security Agreement (OLSA) with LIM Asia Multi-Strategy
Fund Inc. (formerly LIM Asia Arbitrage Fund Inc) and LIM Asia Special Situations
Master Fund Limited (collectively, the “Lenders”) providing for
a US$29,926,801 principal amount Term Loan Facility (the “Facility”).
today that the company and its Canadian affiliate, TVI Pacific Inc. (TSX: TVI),
have signed an Omnibus Loan and Security Agreement (OLSA) with LIM Asia Multi-Strategy
Fund Inc. (formerly LIM Asia Arbitrage Fund Inc) and LIM Asia Special Situations
Master Fund Limited (collectively, the “Lenders”) providing for
a US$29,926,801 principal amount Term Loan Facility (the “Facility”).
The purpose of the Facility is to convert to a term loan the bridge loans
previously made to TVIRD by the Lenders (in the aggregate amount of approximately
US$25.2 million) and accrued interest and fees (in the aggregate amount of
approximately US$1,731,801); and to provide TVIRD with additional working
capital funding to further advance commissioning and construction activities
and to support mining and processing activities at the Canatuan mine site,
located on the Zamboanga Peninsula in southern Philippines.
“We are pleased to conclude these financing discussions with the LIM
Group,” stated Eugene T. Mateo, President of TVIRD. “By converting
the previous bridge loan funds into a longer term facility, together with
the new funds provided by the facility, management of TVIRD believes that
it now has sufficient funds to establish commercial production from the Sulphide
Project at Canatuan.”
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The
TVIRD Canatuan Sulphide Project production facility. The company now has sufficient funds to establish commercial production. |
The OLSA provides that immediately on fulfilment of a number
of conditions precedent, including the receipt of satisfactory due diligence
reports of TVIRD and related companies, all outstanding amounts payable to the
Lenders under the previous bridge financing facility will be converted to an
initial advance under the Facility. Subsequent advances will be available for
a period of three months. Background information regarding the previous bridge
financing facility is set out in the news releases disseminated by TVIRD on
March 13, October 14, November 10, and December 15, 2008, and can be viewed
via the following links: http://www./article.php?id=160,
http://www./article.php?id=197,
http://www./article.php?id=203,
and http://www./article.php?id=212
The Term of the Facility is five years ending January 20, 2014.
After an initial 180-day period from the date of the initial advance, TVIRD
is required to begin repaying principal and interest amounts outstanding. The
Facility is subject to a fixed arrangement fee in the amount of US$195,000 and
funds borrowed under the Facility bear interest at the rate of 10% per year
calculated on the original principal balance, irrespective of the actual outstanding
balance of the loans payable, until the outstanding principal balance of the
Facility is paid in full. In connection with the execution and delivery of the
OLSA, TVI Pacific Inc has agreed to issue to the Lenders share purchase warrants
entitling them to purchase up to 71,689,734 common shares in the capital of
TVI Pacific at any time and from time to time until January 20, 2014, at a purchase
price of CDN$0.016 per share.
The Facility is secured by a charge on all of the present and
after acquired assets of TVIRD. TVI Pacific Inc has guaranteed the obligations
of TVIRD under the OLSA, has granted a security interest in its inter-company
receivables, and caused its indirectly wholly owned subsidiary, TVI International
Marketing Limited, to grant a security interest to the Lenders in all of the
outstanding shares of TVIRD. As contemplated by the OLSA, all of the inter-company
loans made by the Company or its subsidiary, TVI Minerals Processing Inc., to
TVIRD are subordinated and postponed to the Facility.
Under the OLSA the Lenders, collectively, have the right to
nominate a person for election as a director of each of TVIRD and TVI Pacific
and TVIRD and TVI Pacific have each agreed to use reasonable efforts to cause
the election of the director nominees designated by the Lenders.
The Company has also entered into an Advisory Agreement with
a third party (Advisor). The Advisor will be entitled to a fee equal to 10%
per year of the Facility as defined in the OLSA, payable on the last business
day of each quarter. In addition, commencing December 31, 2010, the Advisor
will be entitled to profit participation of 40% of any cash surplus in TVIRD.
“This is a tremendous step forward for our company, for
employees, for the indigenous people of Canatuan, for the residents of Siocon,
and for all our suppliers and other stakeholders, as it ensures that despite
the very difficult global economic environment, we can continue to develop our
company and contribute to the economic development of the region,” Mateo
said.
