MBAC Fertilizer Reports 2014 Financial Results

MBAC Fertilizer Corp. (TSX:MBC) announced its financial results for 2014 and provided an operational update on its Itafós Arraias Single Super phosphate operations.

Highlights of 2014 include:

• Executed debt extension agreements with its senior lenders permitting deferral of principal and interest payments on project finance and certain working capital loans by up to two years;
• In consultation with its senior lenders, engaged Deutsche Bank AG to act as its financial advisor in connection with the Company’s strategic review process with the mandate to help find a definitive solution to the Company’s working capital constraints and liquidity requirements;
• Executed and received disbursements from new working capital loans totaling approximately US$16.0 million;
• Performance throughout 2014 was impacted by significant working capital constraints, which placed limitation on the Company’s ability to purchase consumables and maintain a more adequate spare parts inventory and thereby limited operational efforts;
• Produced 98,533 tonnes of SSP, including approximately 22,000 tonnes in September 2014;
• Generated pre-commercial net revenue of US$16.4 million from the sale of SSP;
• Established a daily production record of approximately 1,700 tonnes of SSP, exceeding the expected daily production volume that the Itafós Operations was originally designed for;
• In April 2014, completed a bought deal public equity offering, which included significant management and insider participation, for net proceeds of US$17.4 million (C$19.2 million);
• Sold the CELTINS note receivable receiving total net cash proceeds of US$6.7 million (R$14.8 million); and
• Implemented a number of initiatives aimed at optimizing performance and reducing annual costs by approximately $4.0 million.

Itafós Arraias operations:

MBAC’s performance throughout 2014 was impacted by significant working capital constraints, which placed limitation on the Company’s ability to purchase consumables and maintain a more adequate spare parts inventory. Subsequent to year-end, MBAC suspended production at its Itafós Operations largely in response to market conditions and as a means to preserve working capital and complete its strategic review process. The Itafós Operations are currently on care and maintenance, and the Company expects to resume production if and when its strategic review process is successfully completed and its liquidity constraints are resolved. Given that the strategic review process is ongoing and that the Company has no certainty of when, or if, the strategic review process will be successfully completed, MBAC’s previously disclosed production and sales guidance for 2015 and 2016 are no longer valid.

Click here to read the full MBAC Fertilizer Corp. (TSX:MBC) press release.