Societe Generale joined the bank consortium for Gensource Potash’s senior debt facility as joint mandated lead arranger alongside KfW IPEX-Bank, which is serving as mandated lead arranger and coordinating bank. The facility is for the Tugaske project finance package
“We are extremely pleased that Societe Generale wanted to be part of the Tugaske opportunity and we are thrilled to add them as a joint mandated lead arranger with KfW IPEX-Bank,” Mike Ferguson, president and CEO of Gensource, said. “These two lenders are major players in the greenfield project finance in mining and agriculture sectors and have demonstrated success in financing fertilizer projects all over the world. If Aesop is correct when he said that ‘A man is known by the company he keeps,’ then Gensource is very proud to be in the company of two such strong and well-respected international financial institutions as KfW IPEX-Bank and Societe Generale. The addition of Societe Generale as joint lead arranger is another significant step towards completing the financing that will move Tugaske to construction this year.”
“As a leading bank with a global footprint in the mining industry and a presence in Canada we are very pleased to have the opportunity to take a lead role in the financing of this innovative fertilizer mining project alongside KfW IPEX-Bank,” Lenaig Trenaux, regional head of metals and mining, Americas of Societe Generale, said.
“We are pleased to have found with Societe Generale a partner bank that will take part in the ongoing work on this important and sustainable fertilizer mining project which will not only benefit the Canadian economy but also support our German suppliers, important clients of KfW IPEX-Bank, in these turbulent times.” Michael Nosbüsch, global head of metals and mining at KfW IPEX-Bank, said.
Gensource, Societe Generale and KfW IPEX-Bank executed agreements which indicate:
- KfW IPEX-Bank and Societe Generale will act as joint mandated lead arrangers to arrange the debt facility for the Tugaske project.
- A total debt facility of approximately $180 million is agreed. Each of the mandated lead arrangers will support the project with a significant take and hold commitment.
- KfW IPEX-Bank and Societe Generale will complete due diligence work together, including the in-depth review of technical, environmental, social, market and financial aspects of the project.
- A significant portion of the facility is to have Export Credit Agency (ECA) coverage to reduce both lender risks and the project’s interest costs. Structuring of the ECA component will be managed by KfW IPEX-Bank.
- In its roles as deal coordinator and bookrunner, KfW IPEX-Bank will continue its work to form a supportive and reliable lender consortium for the debt facility.
A key aspect of the agreement indicates that a significant portion of the overall debt facility is to be provided by Societe Generale and KfW IPEX-Bank. Final definitive terms for the debt facility will be developed and agreed following the due diligence process. Subsequently, Gensource and the mandated lead arrangers will prepare and execute a definitive facility and security documentation at financial close. The ultimate financing of the Tugaske project is conditional upon the successful completion of the detailed due diligence process.
“Climate change and food security issues make it urgently necessary to forge tighter links between economic and ecological matters in the interests of sustainable development. We feel fortunate to have KfW IPEX-Bank and Societe Generale as like-minded partners who share the same vision and commitment toward promoting ecologically sound, socially just and economically robust projects,” Ferguson said. “We envision the Tugaske project as an innovation in potash production that can help safeguard both the livelihoods and quality of life for coming generations.”
Societe Generale is a French multinational investment bank and financial services company headquartered in Paris.
KfW IPEX-Bank is a specialist financier of international structured project and export finance headquartered in Frankfurt, Germany. It is an affiliate of German bank KfW Bankengruppe.
Gensource Potash is a fertilizer development company based in Saskatoon, SK.