The company said it received terms from Bank of Montreal to provide C$8,683,000 in new secured debt under three separate loan facilities.
Progressive Planet Solutions Inc (TSX-V:PLAN) (PLAN) announced that it has retained Bank of Montreal (BMO) to guarantee the debt component of its proposed acquisition of Absorbent Products Ltd (APL) .
The company said it received terms from BMO to provide C$8,683,000 of new secured debt in aggregate under three separate loan facilities, including: a loan facility of $723,000 at prime plus 1.75 % for a period of six years; Loan facility of $990,000 at prime rate plus 1.25% for a period of five years; and a loan facility of $6,970,000 at prime rate plus 0.75% for a period of 25 years.
“Today marks another significant milestone for Progressive Planet, having engaged Bank of Montreal to guarantee the debt component of the counterparty,” Progressive Planet CEO Steve Harpur said in a statement.
Progressive Planet has also noted that the completion of the debt underwriting and provisioning is subject to, among other things, the following terms and conditions:
- Payment of non-refundable sales charge of $50,000. These fees of $50,000 were paid as of January 28, 2022;
- Realization of personal guarantees by three PLAN insiders for a total of $3 million for a period of three years; and,
- Registration of typical security interests associated with corporate loans, including, but not limited to, general security interests to be granted by PLAN and APL over their respective assets, and registration of mortgages over debts on the five long-term industrial leases term held by APL.
He added that personal guarantees will be provided by the following people:
- George David Richardson to personally guarantee $1.25 million of the total debt for a period of three years;
- Peter Lacey to personally guarantee $1.25 million of total debt for a period of three years; and,
- Chris Halsey-Brandt to personally guarantee $500,000 of the total debt for a period of three years.
“I would like to personally thank Dave, Peter and Chris for taking these personal guarantees which enabled PLAN to borrow money on the terms described in this press release. We are truly grateful to have such a commitment from the share of key shareholders,” added Harpur.
In return for these personal guarantees, Progressive Planet has declared its intention to issue warrants to each of the guarantors as loan bonuses in the following amounts:
- George David Richardson – 3,472,222 warrants giving the right to purchase shares of PLAN at $0.36 per share for a period of three years.
- Peter Lacey – 3,472,222 warrants giving the right to purchase shares of PLAN at $0.36 per share for a period of three years.
- Chris Halsey-Brandt – 1,388,888 warrants giving the right to purchase shares of PLAN at $0.36 per share for a period of three years.
Additionally, Progressive Planet has indicated that it has received written commitments in excess of the 13.5 million units announced in the private placement announced on December 24, 2021, and stated that it intends to rely on the over-allotment option to complete the private placement.
The company added that it is currently working to formalize the terms and conditions to complete the debt financing and is also working to complete the terms and conditions to obtain final approval from the TSX Venture Exchange for the purchase transaction. APL.
Progressive Planet is an emerging technology company that delivers innovative circular solutions and eco-friendly micronized minerals that naturally unlock sustainability benefits in the construction and agriculture sectors.
Contact Sean at [email protected]