Orbite announces a $15 mln financing from the govt

Orbite Technologies Inc. announced yesterday that it has entered into a letter of intent with Investissement Quebec, acting as mandatory of the Government of Quebec, whereby Investissement Quebec has agreed to provide the company with an aggregate financing of $15 million. The Financing is expected to be comprised of the purchase of 10 per cent convertible non-secured debentures in the principal amount of $5 million, the purchase of class A shares of the company in the amount of $5 million, together with the grant of a $4.9 million bridge loan secured by the company's 2016 refundable investment tax credits.

"These funds, as we receive them, will allow us to reaccelerate our activities at Cap-Chat towards completion of our high purity alumina (HPA) plant," stated Glenn Kelly, CEO of Orbite. "Commissioning activities, which have been ongoing these past weeks, continue to meet expectations, and we will be providing updates on plant start-up timing as we close the various tranches of the financing. We are grateful to Investissement Quebec, who have proven to be a stable and supportive partner, for their continued support and commitment. We are also pleased with the structure of the financing, which limits dilution compared to alternative financing options."

Each Debenture consists of $1,000 principal amount of convertible unsecured debentures of the company, which will mature five years from the closing date and will bear interest at a rate of 10 per cent per annum payable monthly. The interest accrued during the first 2 years will be capitalized and payable in cash at the maturity date of the Debenture or convertible into shares at the then market price, at the sole option of the holder. Each Debenture (capital only) will be convertible, at the option of the holder at any time prior to the maturity date, into class A shares of the Company at a price of $0.241 per share.

The equity portion of the Financing will be comprised of the purchase of 20,746,888 class A shares of Orbite at a price of $0.241 per share, for total gross proceeds of $5 million.