GSFC enters into standby agreement with Karnalyte Resources Inc.

VADODARA, India, Nov. 15, 2018 /CNW/ - Gujarat State Fertilizers & Chemicals Limited ("GSFC") is issuing this news release pursuant to the early warning requirements of Canada's National Instrument 62-104 Take-over Bids and Issuer Bids with respect to common shares of Karnalyte Resources Inc. ("Karnalyte" or the "Company") (TSX; KRN).

On November 14, 2018, GSFC and the Company entered into a standby commitment agreement (the "Standby Agreement"), whereby GSFC agreed that it will exercise its basic subscription privilege in Karnalyte's proposed right offering transaction ("Rights Offering") (see Karnalyte's news release of November 14, 2018) to maintain its pro rata equity interest in Karnalyte. In addition, if less than the maximum number of Karnalyte common shares ("Shares") that may be issued under the Rights Offering are subscribed for by other Karnalyte shareholders, GSFC will subscribe for and purchase such number of Shares so that the maximum number of Shares that may be issued under the Rights Offering will have been issued.

If all Karnalyte shareholders, including GSFC, exercise their basic subscription privilege, GSFC's proportionate ownership of Shares will be unaffected by the Rights Offering. If no other Karnalyte shareholders exercise their basic subscription privilege, GSFC will be obligated to purchase 14,058,282 Shares, resulting in GSFC beneficially owning approximately 47.66% of the then outstanding Shares.

GSFC intends to support Karnalyte  as a long-term strategic investor by acquiring the Shares. Subject to applicable regulatory and contractual restrictions, GSFC may from time to time dispose of, or acquire, additional securities of Karnalyte.

Karnalyte's head office is located at 3150B Faithfull Avenue, Saskatoon, Saskatchewan, S7K 8H3.

GSFC will file a report under National Instrument 62-104 –Take-over Bids and Issuer Bids under the Company's profile on SEDAR (www.sedar.com) containing additional information respecting the foregoing matters.

About GSFC
GSFC is a leading Indian Fortune 500 chemicals and fertilizer company that has been in business for more than 50 years. GSFC currently operates one ammonia plant of 445,000 Mtpy nameplate capacity, which was commissioned in the year 2000 based on Linde's technology (after the two old ammonia plants established in 1969 were retired due to higher energy consumption), and two urea plants, with a total of 370,590 Mtpy nameplate capacity which were established in 1969, at its fertilizer production complex in Vadodara, Gujarat State, India. GSFC's urea plants have consistently operated at optimum capacity over the past five decades.

SOURCE Gujarat State Fertilizers & Chemicals Limited

or to obtain a copy of the report, please contact: Sanjeev V. Varma, P.O. Fertilizernagar, Dist. Vadodara, Gujarat, India 391 750, [phone]