Fortress Bioenergy Ltd, a subsidiary of Fortress Paper Ltd (TSX: FTP), has entered into an agreement with IAM Infrastructure Private Debt Fund LP to receive a $40 million secured loan. Fortress, a Canadian producer of specialty pulp and security papers products, said the loan’s proceeds will be used to repay convertible debentures, among other things. IAM Infrastructure Private Debt Fund LP is managed by IAM Private Debt Group, a division of Toronto-based Integrated Asset Management Corp. The fund raised $347 million last September.
PRESS RELEASE
Fortress Paper Announces $40,000,000 Credit Agreement
VANCOUVER, BRITISH COLUMBIA–(Marketwired – Jan. 20, 2017) – Fortress Paper Ltd. (“Fortress Paper” or the “Company”) (TSX:FTP) is pleased to announce that its wholly owned subsidiary, Fortress Bioenergy Ltd. (“FBEL”), as borrower, has entered into a credit agreement with IAM Infrastructure Private Debt Fund LP (“IAM”), as lender, in relation to a $40 million secured loan (the “IAM Loan”) which matures 14 years from the date of advance, and is repayable in monthly payments of principal and interest over the term. The IAM Loan will accrue interest at a rate of 6% per annum plus an account maintenance fee of 0.5% per annum and is expected to be advanced in full in ten business days subject to certain customary conditions. FBEL is the owner and operator of the electricity cogeneration facility located at the Fortress Specialty Cellulose Inc. (“FSC”) mill in Thurso, Québec. The IAM Loan is secured against all of the assets of FBEL. The IAM Loan is also guaranteed by the Company’s wholly owned subsidiary, FSC, and Fortress Paper.
Investissement Québec (“IQ”), acting on behalf of the government of Québec, has agreed to subordinate its security rights in relation to its outstanding loan with FBEL and FSC in favour of the IAM Loan. In consideration of such subordination, the Company has agreed with IQ to match the interest rate payable on $40 million principal amount of the outstanding IQ loan to that payable pursuant to the IAM Loan. All principal payments on the IQ loan made by the Company will be applied firstly to the higher interest bearing principal amount outstanding.
The Company intends to use the proceeds of the IAM Loan to repay convertible debentures issued by Fortress Paper and for general corporate purposes.
Yvon Pelletier, the Company’s Chief Executive Officer commented, “We are pleased to announce the addition of the IAM Loan as part of our long-term capital structure. Securing the $40 million loan provides us with greater financial flexibility to manage our outstanding indebtedness and thereby support our long-term growth strategy.”
Philip Robson, President of IAM’s Private Debt Group commented, “We are excited to support another operational bio-energy project in the Province of Quebec. Fortress Paper continues to invest in its Thurso, Québec facilities and we are pleased to be part of the financing team.”
About Fortress Paper
Fortress Paper operates internationally in two distinct business segments: dissolving pulp and security paper products. The Company operates its dissolving pulp business at the Fortress Specialty Cellulose Mill located in Canada, which has expanded into the renewable energy generation sector with the construction of a cogeneration facility. The Company operates its security paper products business at the Landqart Mill located in Switzerland, where it produces banknote, passport, visa and other brand protection and security papers.
About Integrated Asset Management (TSX:IAM)
IAM is one of Canada’s leading alternative asset management companies with approximately $2.6 billion in assets and committed capital under management in real estate and private debt.
Contact Information
Fortress Paper Ltd.
604-904-2328
info@fortresspaper.com
IAM, Private Debt Group
416-202-6673
gdimmer@iamgroup.ca
Photo courtesy of Fortress Paper Ltd
If you do not receive this within five minutes, please try and sign in again. If the problem persists, please
email: subscriptions@peimedia.com.