Canada MBAC Fertilizer agrees to sell shares for working capital

27 March 2014 22:50 Source:ICIS News

HOUSTON (ICIS)--MBAC Fertilizer will sell almost 26m stock units as part of an agreement with underwriter Canaccord Genuity in a deal that aims to raise Canadian dollars (C$) 18.0m ($16.2m), which will be primarily used for working capital, the Canadian fertilizer producer announced on Thursday.

Toronto-based MBAC is a Canadian phosphate and potash producer already active in Brazil as the company’s Itafos Arraias Project in Cerrado began operations in July 2013 producing granulated single superphosphate (SSP). The Itafos is the first large-scale fertilizer facility in the booming agricultural region of Cerrado.

In a statement, the company said that each unit will have issue price of C$0.70 and will be comprised of one common share of the company and one common share purchase warrant.

Each warrant will entitle the holder to purchase one common share at an exercise price of C$1.00 per share at any time within 60 months from the closing date of the offering.

MBAC said Canaccord will also have the option for 30 days after and including the closing date of the offering, to purchase up to an additional 3.8m units at the issue price per unit to cover over-allotments and for market stabilisation purposes. If this option is exercised in full, MBAC will gain approximately C$2.8m.

The fertilizer producer said the offering is scheduled to close before 17 April and is subject to the receipt of all necessary regulatory and stock exchange approvals, including the approval of the Toronto Stock Exchange and applicable securities regulatory authorities.

($1 = C$1.11)

By Mark Milam