Victory Nickel Inc.

Published : November 26th, 2015

Victory Nickel Announces Debt Restructuring Package

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Keywords :   Creditors | Debt | Market | Nickel | Oil |

Victory Nickel Announces Debt Restructuring Package

TORONTO, Nov. 26, 2015 (GLOBE NEWSWIRE) -- Victory Nickel Inc. ("Victory Nickel" or the "Company") (TSX:NI, www.victorynickel.ca) today that it has entered into a debt restructuring agreement (the "Restructuring") with its secured lender (the "Secured Lender"), to restructure and extend the Company's US$5.15 million senior secured 14.8% notes (the "SPA Loan"), dated as of April 24, 2014 and amended June 3, 2015 plus accrued interest to September 30, 2015. In connection with this transaction, the Company is restructuring outstanding debt obligations to its unsecured lenders and certain of its trade creditors.

Victory Nickel and the Secured Lender have been in discussion with respect to the Restructuring of the SPA Loan since the Company was unable to repay its SPA Loan on the maturity date of July 30, 2015, approximately US$2 million of unsecured Promissory Convertible Notes due November 12, 2015, and interest payments due June 30, 2015 and September 30, 2015.
"The objective of the restructuring is to allow time for the oil and gas markets to stabilize and provide an environment for the Company to generate cash flow from its investment in its frac sand processing facilities in Seven Persons Alberta," said Rene Galipeau, Vice-Chairman & Chief Executive Officer of Victory Nickel Inc. "We are pleased that our secured lender recognizes the potential of these assets in a normalized market and is prepared to wait for repayment of its loan."

Completion of the Restructuring with the Secured Lender, unsecured lenders and trade creditors is subject to normal regulatory approvals and final documentation. As previously announced, the Company has been placed under remedial delisting review by the TSX. No assurance can be provided as to the outcome of that review and therefore continued qualification for listing on the TSX.

Details of the debt restructuring are as follows:

Secured Loan Agreement

Victory Nickel has entered into a binding term sheet with its Secured Lender to amend the SPA Loan (the "New SPA Loan"). Under terms of the agreement the Secured Lender has agreed to extend the maturity date of the SPA Loan by 30 months to January 31, 2018 (the "Maturity Date"). The facility amount under the New SPA Loan has been increased to US$5,500,000, to be used to repay the principal of $5,150,000 and accrued interest to September 30, 2015.

The interest rate on the New SPA Loan will remain unchanged at 14.8% with interest payable in arrears. The New SPA Loan will be due in full on the Maturity Date, subject to a cash sweep of 75 % of free cash flow ("Free Cash Flow") payable within 45 days following the end of each fiscal quarter. Free Cash Flow will be calculated based on the Company's quarterly unaudited and annual audited consolidated statements of cash flows, and be calculated as net cash from operating activities, plus net cash from investing activities, plus interest and lease payments as shown in cash flows from financing activities. Allowable investing activities must be approved by the Secured Lender in advance.

For each $1,000,000 advanced under the New SPA Loan, the Lender shall receive warrants entitling the Lender to purchase 500,000 Victory Nickel shares exercisable at CDN$0.25 per share for a period of two years from the closing date of the transaction (the "Warrants"). Any warrants previously issued under the SPA Loan will be cancelled and replaced with Warrants.
The Lender will receive a fee in shares equal to 4% of the outstanding shares prior to the Restructuring. In addition, the Company must agree to not make any payments to settle past debts of unsecured debt holders prior to repayment of the secured debt without the Secured Lender's approval.

Unsecured Lenders

The Company has issued two-year unsecured promissory convertible notes aggregating approximately US$6,000,000 (the "Promissory Convertible Notes") with an interest rate of 14.8% per annum and convertible at the option of the holder into the Company's common shares at C$1.00. One Promissory Convertible Note in the amount of $2,000,000 is in default as it was due on November 11, 2015, three Promissory Convertible Notes aggregating $750,000 are due in February 2016, four Promissory Convertible Notes aggregating to C$265,000 are due at various times between January and March, 2016 and one Promissory Convertible Note in the amount of $3,000,000 is due in July, 2016. The Company was not able to make the interest payment due on June 30, 2015 and September 30, 2015.

The following terms have been presented to the holders of the Promissory Convertible Notes:

  • 50% of the amount of the Promissory Convertible Notes will be converted to common shares of Victory Nickel valued at a price of C$0.25 per share.
  • The remaining Promissory Convertible Notes will be replaced with new promissory convertible notes (the "New Promissory Convertible Notes") with the following terms:

1) A maturity date of July 31, 2018.

Read the rest of the article at finance.yahoo.com

Victory Nickel Inc.

DEVELOPMENT STAGE
CODE : NI.TO
ISIN : CA92647F1027
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Victory Nickel is a nickel development stage company based in Canada.

Victory Nickel develops nickel and palladium in Canada, and holds various exploration projects in Canada.

Its main asset in development is MINAGO in Canada and its main exploration properties are MEL PROPERTY and LAC ROCHER SULPHIDE NICKEL in Canada.

Victory Nickel is listed in Canada. Its market capitalisation is CA$ 1.7 millions as of today (US$ 1.3 millions, € 1.2 millions).

Its stock quote reached its highest recent level on January 08, 2010 at CA$ 2.20, and its lowest recent point on January 29, 2016 at CA$ 0.01.

Victory Nickel has 57 640 000 shares outstanding.

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Annual reports of Victory Nickel Inc.
2007 Annual report
Financings of Victory Nickel Inc.
7/31/2013Announces Successful Rights Offering to Shareholders
7/31/2013Announces Successful Rights Offering to Shareholders
6/14/2013Announces Rights Offering to Shareholders
Nominations of Victory Nickel Inc.
8/7/2013Announces Changes to Board of Directors
6/19/2012Creates Victory Silica Ltd., Appoints Ken Murdock as CEO, In...
Financials of Victory Nickel Inc.
4/1/2015Announces Fourth Quarter and Fiscal 2014 Financial and Opera...
Project news of Victory Nickel Inc.
4/14/2015Temporarily Suspends Frac Sand Production
10/9/2013Subsidiary Victory Silica Progressing Toward Frac Sand Produ...
4/12/2012(Minago)Drilling Nickel Bearing Area South of Minago Sulphide Nickel...
4/4/2012(Minago)Drill Program Progressing at Minago Sulphide Nickel Project
9/19/2011(Minago)Receives Board Approval to Proceed With Development of Minag...
8/24/2011(Minago)Granted Environment Act Licence for Minago Sulphide Nickel M...
8/16/2011(Minago)Estimates 21 Million to 34 Million Tonne ETMI in Minago Nort...
8/8/2011(Minago)Identifies Western Extension of Nose Deposit at Minago
7/25/2011(Minago)Completes Reporting of North Limb Drilling at Minago Project
7/20/2011(Minago)Reports Further Positive North Limb Drilling at Minago Proje...
6/28/2011(Minago)North Limb Drilling Continues to Return Positive Results at ...
5/2/2011(Minago)Increases Minago Pit-Constrained Measured & Indicated Resour...
2/28/2011(Minago)Winter Work Program Underway at Victory Nickel's Minago Proj...
Corporate news of Victory Nickel Inc.
12/14/2015Victory Nickel Unsecured Note Holder Provides Notice of Defa...
11/26/2015Victory Nickel Announces Debt Restructuring Package
10/2/2015Victory Nickel Granted Extension for Delisting Review by the...
10/2/2015TSX Delisting Review - Victory Nickel Inc. (Symbol: NI)
8/14/2015Victory Nickel Announces Second Quarter 2015 Financial and O...
8/5/2015Victory Nickel Comments on Remedial Delisting Review Initiat...
8/5/2015TSX Delisting Review - Victory Nickel Inc. (Symbol: NI)
7/31/2015Victory Nickel Updates Secured Debt Status
7/2/2015Victory Nickel Announces Non-Payment of Quarterly Interest o...
6/29/2015Victory Nickel Announces Results of Annual and Special Meeti...
4/22/2015Announces Loan Extension
4/14/2015Victory Nickel Announces Receipt of Payment for Lynn Lake Pr...
4/14/2015IIROC Trading Halt - NI
4/6/2015Announces Receipt of Payment for Lynn Lake Project Option
4/6/2015Victory Nickel Announces Receipt of Payment for Lynn Lake Pr...
4/1/2015Victory Nickel Announces Fourth Quarter and Fiscal 2014 Fina...
3/25/2015Victory Nickel Announces Management Change
3/25/2015Announces Management Change
3/18/2015Victory Nickel's Bear Coulee Frac Sand Project Exceeds API S...
3/18/2015Bear Coulee Frac Sand Project Exceeds API Specs
2/25/2015Victory Nickel Provides Update and Outlook for Frac Sand Ope...
2/3/2015Victory Nickel Announces NI 43-101 Resource on Wisconsin Fra...
1/9/2015Victory Nickel Expands Its Wisconsin Frac Sand Supply Chain
11/14/2014Victory Nickel Announces Third Quarter and Nine Month Financ...
11/12/2014Victory Nickel Board Approves Proceeding with Phase Two of F...
11/4/2014Victory Nickel Options Lynn Lake Nickel Project to Corazon M...
10/29/2014Victory Nickel Adds Final Crew to Operate 24/7 at 7P Frac Sa...
10/2/2014Victory Nickel Options Wisconsin Frac Sand Property
9/12/2014Victory Nickel Announces Consolidation of Common Shares
9/5/2014Victory Nickel to Present at the 16th Annual Global Investme...
8/14/2014Victory Nickel Announces Second Quarter Financial Results
8/13/2014Victory Nickel Enters Into Sales Contract for 20% of 7P Plan...
8/11/2014Victory Nickel Announces Successful Commissioning at 7P Frac...
7/7/2014Victory Nickel Announces Closing of Convertible Note Financi...
5/30/2014Victory Nickel Announces Results of Annual and Special Meeti...
5/28/2014Victory Nickel Reminder: Annual and Special Meeting of Share...
5/16/2014Victory Nickel Files Q1 Financial Statements
5/15/2014Victory Nickel Obtains Line of Credit for Frac Sand Business
4/30/2014Victory Nickel Applies for Amendment to Minago EAL
4/22/2014Victory Nickel and Nuinsco Announce Conversion of Loan to Di...
11/4/2013Provides Update on Frac Sand Plant Development
8/6/2013Silica Ltd., a Subsidiary of Victory Nickel Inc., Hires Frac...
8/2/2013Acquisition of Securities of Victory Nickel Inc. and Filing ...
7/17/2013Announces Hiring of Key Personnel, Equipment Orders for Albe...
7/11/2013Set to Begin Development of Seven Persons Frac Sand Plant
6/28/2013Announces Results of Annual and Special Meeting
5/28/2013Adopts Advance Notice By-Law
3/26/2013Announces Amended and Restated Loan Agreement
3/22/2013Completes $2.2 million Private Placement
2/25/2013Announces Filing of Application to Change Permit Status of S...
1/25/2013Announces Loan Agreement
1/9/2013Completes Asset Purchase Agreement for Seven Persons Sand Pl...
10/18/2012s Status of Victory Silica Frac Sand Initiative
6/26/2012Ken Murdock Discusses Plans for Victory Silica's Entry Into ...
5/14/2012Reports on Winter Programs
8/10/2011(Minago)Again Improves Economics at Minago
8/3/2011Identifies Depth Extension to Known Resource at Mel Nickel P...
7/26/2011Receives Draft Environment Act Licence
6/29/2011CORRECTION FROM SOURCE: Victory Nickel Receives Draft Enviro...
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