OTTAWA, April 18, 2016 /CNW/ - Clearford Water Systems
Inc. ("Clearford" or the "Company"), a TSX Venture 50 Company, the
provider of the Clearford One™ unified water management and
sanitation system, today announced that it has entered into a
long-term debt financing agreement (the "Agreement") with
Sustainable Water Projects Inc. ("SWP"), a wholly owned subsidiary
of Sustainable Water Investments Inc., a Vancouver-based holding company capitalized by
a European bond issuance platform, pursuant to which SWP will
acquire Clearford's existing debt of C$18.25
million and advance an additional project-linked loan in the
amount of between C$5.75 to 6.75
million (collectively, the "Investment") to the Company. The
Investment is scheduled to close by April
29, 2016 (the "Closing Date"), subject to the completion of
definitive documentation giving effect to the transactions
contemplated under the Agreement and the receipt of any necessary
approvals required from the TSX Venture Exchange.
Under the terms of the Agreement, SWP will acquire Clearford's
existing loans in the aggregate principal amount of C$18.25 million (the "Existing Debt"), including
the accrued interest thereon, from the current holder. The Existing
Debt will be consolidated into a single loan (the "Restructured
Loan") denominated in the US$ equivalent of C$18.25 million at the Bank of Canada noon exchange rate on the Closing Date
(the "Principal Amount"). The Restructured Loan will have a 12-year
term, with the Principal Amount bearing interest at 11% per annum.
The "Make Whole" provision of the Existing Debt will be cancelled,
and replaced with an amortization schedule, pursuant to which a
percentage of the margin realized by the Company from the worldwide
sales of its Clearford One™ system or the equivalent thereof shall
be applied, on an annual basis, towards the repayment of the
outstanding Principal Amount.
In addition to the Restructured Loan, SWP shall advance to the
Company an additional project-linked loan in the US$ equivalent of
between C$5.75 to 6.75 million at the
Bank of Canada noon exchange rate
on the Closing Date (the "Additional Advance"). The Additional
Advance will have a 10-year term, with the principal amount bearing
interest at 9.75% per annum.
The parties to the Agreement, which includes the current holder
of the Existing Debt, have undertaken to act in good faith to close
the transactions contemplated under the Agreement as soon as
practical, but no later than the Closing Date. Payment of or the
demand of any accrued interest due under the Existing Debt, which
forms part of the consideration for the Investment, during the
interim period was postponed to the Closing Date.
"We are pleased to report another material milestone in the
business of Clearford", said Kevin
Loiselle, President and CEO of Clearford. "The new debt
package better reflects the Company's strategic positioning and
transition to growth, with financing terms that provide Clearford
with much added flexibility in the management of its cost of
capital. We look forward to utilizing improved resources and
capabilities to expanding Clearford's value proposition in
Canada and beyond".
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.
About Clearford Water Systems Inc.
Clearford Water
Systems Inc. (TSX-V: CLI) is a provider of unified water management
and sanitation systems based on Clearford One™. Clearford One™ is a
proprietary system comprised of ClearDigest™ smart digester,
ClearConvey™ small bore sewer, and ClearRecover™ final treatment
facility. For additional information about Clearford Water Systems,
please visit www.clearford.com
Forward Looking Statements
This news release contains
certain statements that constitute forward-looking statements as
they relate to the Company and its management. Forward-looking
statements are not historical facts but represent management's
current expectation of future events, and can be identified by
words such as "believe", "expects", "will", "intends", "plans",
"projects", "anticipates", "estimates", "continues" and similar
expressions. Although management believes that the expectations
represented in such forward-looking statements are reasonable,
there can be no assurance that they will prove to be correct.
By their nature, forward-looking statements include assumptions
and are subject to inherent risks and uncertainties that could
cause actual future results, conditions, actions or events to
differ materially from those in the forward-looking statements. If
and when forward-looking statements are set out in this news
release, Clearford will also set out the material risk factors or
assumptions used to develop the forward-looking statements. Except
as expressly required by applicable securities law, the Company
assumes no obligation to update or revise any forward-looking
statements. The future outcomes that relate to forward-looking
statements may be influenced by many factors, including, but not
limited to: industry cyclicality; the ability to secure third party
agreements; successful integration of Clearford's system with third
party technology; competition; reduction in demand for products;
collection from customers; relationships with suppliers; product
liability; intellectual property; reliance on key personnel;
environmental; interest rates; uninsured and underinsured losses;
operating hazards; risks of future legal proceedings; income tax
matters; credit facilities; availability and terms of financing;
distribution of securities; restrictions on potential growth;
effect of market interest rates on price of securities; and
potential dilution.
SOURCE Clearford Water Systems Inc.
