FRIEDENS, Pa., Dec. 21, 2020 /CNW/ - Corsa Coal Corp.
(TSXV: CSO) (OTCQX: CRSXF) ("Corsa" or the "Company") today
announced that certain subsidiaries of the Company, as borrowers,
have entered into a five-year secured term loan with KeyBank
National Association for US$25
million (the "Term Loan") through the Main Street Lending
Program established by the board of governors of the U.S. Federal
Reserve System. Under this program, lending is facilitated through
a special purpose vehicle established by Federal Reserve Bank of
Boston which has committed to
purchase a participation interest equal to 95% of the Term Loan.
Subject to the satisfaction of customary conditions to closing,
funding of the Term Loan is expected to occur on or before
December 23, 2020. If such conditions
are not satisfied on or before December 23,
2020, funds cannot be made available to the borrowers and
the Term Loan will not proceed.
"We are pleased to have secured the Term Loan and appreciate the
strong support and relationship that we enjoy with KeyBank which
helped make it possible. This financing is necessary to continue to
manage through the economic impact of the COVID-19 pandemic and the
current metallurgical coal market, in particular our financial
condition and cash flows. The proceeds will be utilized for
restoring a more appropriate level of maintenance capital after two
years of minimal expenditures in this regard, for new mine
development to replenish depleted reserves, and for working capital
as we continue to experience low prices despite the recent increase
in some of the metallurgical coal price indices," said Peter Merritts, Chief Executive Officer of
Corsa.
Pursuant to the terms of the credit agreement (the "Credit
Agreement") and security agreement (the "Security Agreement")
governing the Term Loan, the Term Loan bears interest, payable
monthly, at LIBOR plus 3.00% and contains customary financial
covenants as well as affirmative and negative covenants, including
covenants that would restrict the ability to pay dividends and make
distributions. Until the first anniversary of the closing date of
the Term Loan, interest will paid-in-kind (capitalized) and added
to the principal balance thereof. The Term Loan will be repayable
on each of the third and fourth anniversaries of the closing date
in an amount equal to 15% of the initial principal amount, with the
remaining balance due in full on the fifth anniversary of the
closing date and is be pre-payable at any time without any premium
or penalty. In connection with the arrangement of the Term Loan,
the borrowers will pay a transaction fee and an origination fee,
both of which are customary for arrangements such as these. The
Term Loan will be secured against certain real and personal
property of the borrowers.
Copies of the Credit Agreement and the Security Agreement will
be filed under the Company's profile on SEDAR at www.sedar.com.
The TSX Venture Exchange has granted conditional approval of the
Term Loan.
Information about Corsa
Corsa is a coal mining company focused on the production and
sales of metallurgical coal, an essential ingredient in the
production of steel. Our core business is producing and selling
metallurgical coal to domestic and international steel and coke
producers in the Atlantic and Pacific basin markets.
Forward-Looking Statements
Certain information set forth in this press release contains
"forward-looking statements" and "forward-looking information"
under applicable securities laws (collectively, "forward looking
statements"). Except for statements of historical fact, all other
statements in this press release constitute forward-looking
statements which include management's assessment of future plans
and operations and are based on current internal expectations,
estimates, projections, assumptions and beliefs, which may prove to
be incorrect. Some of the forward-looking statements may be
identified by words such as "estimates", "expects" "anticipates",
"believes", "projects", "plans", "capacity", "hope", "forecast",
"anticipate", "could" and similar expressions. These statements are
not guarantees of future performance and undue reliance should not
be placed on them. Such forward-looking statements necessarily
involve known and unknown risks and uncertainties, which may cause
Corsa's actual performance and financial results in future periods
to differ materially from any projections of future performance or
results expressed or implied by such forward-looking statements.
These risks and uncertainties include, but are not limited to: the
closing and funding of the Term Loan, including satisfaction of
conditions to funding and the timing thereof, anticipated usage and
benefits of the Term Loan and management's ability to anticipate
and manage the foregoing factors and risks. There can be no
assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. The reader is
cautioned not to place undue reliance on forward-looking
statements. Corsa does not undertake to update any of the
forward-looking statements contained in this press release unless
required by law.
The TSX Venture Exchange has in no way passed on the
merits of this news release. Neither the TSX Venture Exchange nor
its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
SOURCE Corsa Coal Corp.