KAFUS INDUSTRIES LTD - Obtains $21 Million Finance Package
Toronto, Ontario, Sep. 24, 1999 (Market News Publishing via COMTEX)
-- Kafus Industries Ltd. is pleased to report that it has confirmed a
$21 million finance package with an independent European investment group
(the "Investor"). Under the terms of the agreement, Kafus is to receive
$10 million in cash immediately with an additional $6 million to be used
at Kafus' request, by the Investor, to repurchase certain existing Kafus
financial instruments. An additional $5 million can be called upon by
Kafus or put by the Investor within 120 days of receipt of the initial
$10 million.
Under the terms of the agreement, cash directly received by Kafus will
be satisfied, by way of an issuance by Kafus of an unsecured promissory
note, bearing interest at 12% with the note non-callable by the Investor
for 5 years and one day. The Investor has the right at any time to convert
the note into Kafus common shares at a premium to current market. Kafus
has reserved the right to repay the note at any time. The standby $5 million
if called or put will be placed by the Investor under identical terms.
This latest financing will assure Kafus' ability to continue to expand
its global development of CanFibre, Kenaf Bio-Composites and Kenaf Paper
as well as give it the resources to identify and seek value-added acquisitions
that are complimentary to its role as a leader in the "global fibre revolution".
Kafus is changing the global landscape through the use of sustainable
alternative resources.
The foregoing contains forward-looking statements, which are subject to
contingencies and uncertainties. Such forward looking statements are
not guarantees of future performance, and are based on numerous assumptions
about future conditions that could prove to be inaccurate including without
limitation, the ability to produce the same MDF test results under commercial
production conditions. Actual events, transactions, and results may differ
materially from anticipated events, transactions or results described
in such statements. Material uncertainties about the future of the company
exist. Kafus is subject to a number of risks and uncertainties, which
are set forth in its filings, with the Securities Exchange Commission.
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