Foraco International Announces Consummation of its Debt Refinancing Leading to a US$ 55.8 Million Reduction of its Debt

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

TORONTO and MARSEILLES, France, July 7, 2021 /CNW/ - Foraco International SA (TSX: FAR) (the "Company" or "Foraco"), a leading global provider of mineral drilling services, announced today the consummation of the debt refinancing (the "Debt Refinancing") originally announced on May 19, 2021, related to its US $146.8 million (*) outstanding bonds raised in 2017 from affiliates of Oaktree Capital Management, L.P. ("Oaktree") and Kartesia Securities IV S.A. ("Kartesia"), and maturing in May 2022.

The US $146.8 million (*) early redemption of such bonds has been completed by way of a repayment of US $91.0 million (*) in cash and the issuance of 9,300,000 ordinary shares of the Company, representing approximately 9.4% of the capital, to the benefit of Oaktree and Kartesia. The cash repayment was financed by a new US $100 million senior secured bonds facility granted by Marathon Asset Management LP ("Marathon"), maturing in December 2025.

The Debt Refinancing resulted in a gain before tax for the Company of US $35.8million (*), and a US $55.8 million (*) reduction in net debt.

The completion of the Debt Refinancing is a significant step forward for Foraco and marks a new era for the Company.

(*) These figures illustrate the estimated effect of the Debt Refinancing on the Company's financial position after giving effect to the Debt Refinancing as if it had occurred on June 30, 2021.

Michael Alexander, Managing Director in Marathon Asset Management's Capital Solutions Group, commented:

"The consummation of our debt financing in Foraco marks an important investment for Marathon and we are thrilled to partner with Foraco and its management team through this transaction. We believe that Foraco has firmly positioned itself to provide critical drilling services to its customers and to capitalize on many exciting growth prospects in the years ahead, across a number of different commodities. Moreover, this refinancing will create a sustainable long-term capital structure that will provide flexibility for the Company to execute on its business plan. Foraco's business showed its resilience during the COVID downturn and we believe it is now well positioned for growth."

Foraco Co-CEO Daniel Simoncini commented:

"Coupled with the current favourable market conditions, our improved capital structure gives us ample capacity to pursue accretive growth strategies and continue building upon the high-quality service offer which we have constantly improved over the past decades. We are particularly proud to have delivered value to our shareholders through this transaction and we renew our grateful thanks to our dedicated Foraco teams."

Foraco Co-CEO and CFO Jean-Pierre Charmensat added:

"The consummation of the early redemption of its outstanding bonds is a significant step forward for Foraco. The transaction is accretive for the Company's shareholders. It is the culmination of meticulous and focused hard work over the past few years to reshape and de-risk the Company's balance sheet and enhance equity value. As previously mentioned, the Company's debt profile will be significantly improved, financial constraints will be eased, and debt maturities will be extended through the end of 2025."

About Marathon Asset Management LP

Marathon Asset Management LP is a global credit manager with $22 billion in assets under management. The firm was formed in 1998 by Chairman & CEO Bruce Richards and CIO Louis Hanover and now has 160 employees across offices in New York City, London and Tokyo. Marathon's core competency is opportunistic investing in the global corporate, emerging market and structured credit markets. Its Capital Solutions platform specializes in designing bespoke private credit transactions to companies in transition and seeks to invest $50 million to $500 million per transaction. Marathon provides partnership capital to sponsors and management teams primarily in the form of senior secured unitranche loans, junior lien debt, mezzanine debt, convertible bonds and preferred equity. For additional information, please visit www.marathonfund.com.

About Foraco

Foraco International SA (TSX:FAR) is a global leading drilling services company that provides turnkey solutions for mining, energy, water and infrastructure projects. Supported by its founding values of integrity, innovation and involvement, Foraco has grown into the 3rd largest global drilling enterprise with operations in 22 countries across five continents. For more information about Foraco, visit www.foraco.com.

Advisory

Basis of Presentation

"Net debt" does not have a standardized meaning as prescribed by International Financial Reporting Standards ("IFRS"), and therefore is considered a non-IFRS measure. "Net debt" corresponds to (i) the current and non-current portion of borrowings excluding (ii) operating leases, net of (iii) cash and cash equivalents. Current and non-current portion of borrowings, borrowings under operating leases and cash and cash equivalents are IFRS measures and are reported as such in the annual financial statements of the Company.

All financial figures and information have been prepared in United States dollars (which includes references to "dollars" and "$"), except where another currency has been indicated, and in accordance with IFRS as issued by the International Accounting Standards Board.

Caution concerning forward-looking statements

This news release contains certain statements or disclosures relating to Foraco that are based on the expectations of its management as well as assumptions made by and information currently available to Foraco which may constitute forward-looking statements or information ("forward-looking statements") under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that Foraco anticipates or expects may, or will occur in the future (in whole or in part) should be considered forward-looking statements. In some cases, forward-looking statements can be identified by the use of the words "believe", "growth", "plan", "prospect", "will" and similar expressions.

In particular, but without limiting the foregoing, this news release contains forward-looking statements pertaining to the following: the Company's capital structure, financial position and debt profile; the Company's strategic position; the Company's ability to capitalize on growth prospects; and the Company's ability to execute on its business plan.

The forward-looking statements contained in this news release reflect several material factors and expectations and assumptions of Foraco including, without limitation: that Foraco will continue to conduct its operations in a manner consistent with past operations; the general continuance of current or, where applicable, assumed industry conditions; availability of debt and/or equity sources to fund Foraco's capital and operating requirements as needed; and certain cost assumptions.

Foraco believes the material factors, expectations and assumptions reflected in the forward-looking statements are reasonable at this time but no assurance can be given that these factors, expectations and assumptions will prove to be correct. The forward-looking statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements including, without limitation: general economic, market and business conditions; the Debt Refinancing may not have the results currently anticipated by Foraco; increased costs and expenses; and certain other risks detailed from time to time in Foraco's public disclosure documents including, without limitation, those risks identified in Foraco's annual information form, copies of which are available on Foraco's SEDAR profile at www.sedar.com. Readers are cautioned that the foregoing list of factors is not exhaustive and are cautioned not to place undue reliance on these forward-looking statements.

Any financial outlook or future oriented financial information in this document, as defined by applicable securities legislation, has been approved by management of the Company. Such financial outlook or future oriented financial information is provided for the purpose of providing information about management's current expectations and management's plans relating to the future of the Company. Readers are cautioned that reliance on such information may not be appropriate for other purposes.

The forward-looking statements contained in this news release are made as of the date hereof and the Corporation undertakes no obligations to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

SOURCE Foraco International SA

Investor Relations, Email: [email protected], Tel: [phone]

Related Links

http://www.foraco.com/