July 16, 2013 16:30 ET
Prophecy Extends Loan Agreement With Waterton Global Value, L.P.
VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 15, 2013) - Prophecy Coal Corp. ("Prophecy" or the "Company") (TSX:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) announces that it has entered a letter agreement dated July 15, 2013 with Waterton Global Value, L.P. ("Waterton") (the "Amendment"), pursuant to which the parties have amended the Senior Secured Credit Agreement originally entered into on July 16, 2012 as amended on February 1, 2013 by a Waiver Agreement (such credit agreement as amended by the waiver agreement and the Amendment, the "Amended Loan Agreement").
Prophecy has agreed to a partial pay down of the principal loan amount from $10m to $6.5m (the "Loan") from restricted cash-on-hand amounting to $3.5m and extending the maturity date from July 16, 2013 to October 31, 2013. The Amended Loan Agreement facility is a non-revolving facility, and any repayment under the facility is not available for re-borrowing.
As consideration for entering into the Amendment, Prophecy shall pay Waterton, in cash, a non-refundable restructuring fee (the "Restructuring Fee") in four (4) equal, consecutive, monthly instalment payments (each, a "Restructuring Instalment"). Each Restructuring Instalment shall be in an amount equal to two percent (2%) of the outstanding principal of the Loan as of the date of the execution of the Amendment. The Restructuring Instalments shall be due and payable on the following dates: the date of the execution of the Amendment; August 29, 2013; September 27, 2013; and October 31, 2013. No Restructuring Instalment(s) will be due or payable following repayment, in full, by Prophecy to Waterton, of all amounts owing under the Amended Loan Agreement. For example, if Prophecy repays all amounts owing under the Amended Loan Agreement in full on September 15, 2013, then Prophecy will not have to pay Waterton the Restructuring Instalments due and payable on September 27, 2013 or October 31, 2013.
As additional consideration, the Amendment also provides that each prepayment and repayment in full or in part of the principal amount outstanding under the Amended Loan Agreement must be increased as follows:
if such payment is of the entire outstanding principal amount of the Loan, Prophecy shall pay to Waterton an amount in cash equal to the quotient of the entire amount outstanding under the Loan and the applicable Discount Metric (as set out below); and
if such payment is a partial payment of the outstanding amount of the Loan, Prophecy shall pay Waterton an amount in cash equal to the quotient of the partial payment amount and the applicable Discount Metric;
where "Discount Metric" means (i) 1.00 from the date of the Amendment up to and including August 16, 2013; (ii) 0.98 from August 17, 2013 up to and including August 31, 2013; (iii) 0.96 for the calendar month of September, 2013; and (iv) 0.94 for the calendar month of October, 2013.
Prophecy shall also bear all costs and expenses reasonably incurred by Waterton in connection with the preparation, negotiation and execution of the Amendment.
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