Nemaska Lithium Inc has provided further details on its project financing plans and to announce that it has entered into an investment agreement with SoftBank Group Corp for a private placement of common share subscription receipts at a price of C$1.12 per Receipt for aggregate gross proceeds of up to C$99,075,000.
“The Corporation’s March 28, 2018 press release outlined its overall project financing plans to raise between $775 million and $825 million to fund the construction and commissioning of its Whabouchi Mine and Shawinigan Plant project and for general working capital. The Placement proceeds will therefore be an important component of the equity portion of the Project Financing as the Corporation continues to work on various complementary financing alternatives, including a $300-350 million debt financing and a $150 million streaming facility for which the Corporation expects to provide further details in the short-term, both combined with additional private and/or public equity offerings. Under the Investment Agreement, SoftBank will acquire up to 9.9% of Nemaska Lithium’s outstanding common shares after giving effect to the consummation of the Project Financing.”
“Upon the completion of this transaction, SoftBank will be a new esteemed shareholder and customer for Nemaska Lithium and we are very pleased to welcome its team to our shareholder base and eventually welcome its nominee to our Board,” said Guy Bourassa, President and CEO of Nemaska Lithium. “As a global technology pioneer and leader, SoftBank’s culture of innovation melds very well with our own corporate values and is a clear endorsement of our approach to producing environmentally friendly, low-cost lithium compounds.”
“This investment in Nemaska is of monumental importance to the SoftBank Group’s strategy,” said Masayoshi Son, Chairman & CEO of SoftBank Group Corp. “We are extremely pleased to be further accelerating the Mobile Revolution, an era of IoT (Internet of Things) and electric vehicles enabled by the fusion of technology and energy storage.”
Completion of the Placement is subject to customary escrow release conditions for this type of transaction, including approval of the Toronto Stock Exchange. The closing of the Placement is expected to occur on or about 10 days following the April 6 announcement.
The gross proceeds from the Placement will be held in escrow and, once the escrow release conditions will be satisfied or waived (which include raising additional equity, concluding the streaming facility agreement and securing debt financing commitments), each Receipt shall be automatically converted into one (1) Share and the net proceeds of the Placement will be released to the Corporation. If the escrow release conditions have not been satisfied or waived by August 6, 2018, the Receipts will be automatically cancelled and funds will revert to SoftBank.
Upon release of the Placement proceeds to the Corporation and for so long as SoftBank holds at least 5% of the outstanding Shares, an agreement providing SoftBank with a right of first offer to purchase up to 20% of the lithium hydroxide and lithium carbonate produced at the Shawinigan Plant from the spodumene concentrate coming from the Whabouchi Mine, will be effective and all purchases will be at pre-agreed discounts applicable to a pre-determined market price-based formula. SoftBank will also be entitled to one nominee as director of Nemaska Lithium and has been granted a pre-emptive right to participate in any further equity offering as long as it holds at least 5% of the Shares then outstanding.
SoftBank has agreed to customary standstill and support covenants and to either vote its Shares in favour of the slate of directors proposed to be elected by the Corporation or abstain from voting its Shares with respect to such matter; provided, however, that in no circumstances may SoftBank withhold any votes attached to any Shares with respect to such matter until the earlier of (a) September 1, 2020 and (b) the commencement of commercial production at the Whabouchi Mine and the Shawinigan Plant.