News Release Cielo Announces Letter of Intent for Cdn$10m Convertible Loan for Edmonton Land Purchase and Loan Repayment
C.CMC | 58 minutes ago
(TheNewswire)
Vancouver, British Columbia, Canada – TheNewswire - March 3, 2021 - Cielo Waste Solutions (CSE:CMC), (OTC:CWSFF), (CNSX:CMC.CN), (WKN:C36) ("Cielo" or the "Company") is pleased to announce it has entered into a binding letter of intent to obtain from one or more lenders (the “Lender(s”)), a non-interest bearing, unsecured convertible loan of CDN$10 Million (the “Loan”).
The net proceeds of the Loan will be used to purchase a site near Edmonton, Alberta, which will be used for Cielo’s planned 100% owned waste to high grade renewable fuel facility (“Edmonton Facility”). This marks the beginning of Cielo’s expansion plans which is ahead of its previous schedule. Cielo will have the discretion to use the balance of the funds as needed, for working capital purposes, and to repay in whole or in part Cielo’s largest secured lender, which is currently owed approximately CDN$3.8 Million.
The Loan is non-interest bearing and unsecured with a term of 12 months (the “Term”). Cielo will be entitled to repay the Loan at any time during the Term without penalty. During the Term, until maturity or such early repayment, the Lender(s) will be entitled to convert the Loan at CDN$1.02 per share. The Loan is also subject to transaction fees equal to CDN$700,000 and Cielo will also pay a cash commission to a third party equal to CDN$800,000. Cielo believes these fees and commissions are well in line with industry standards and eliminate high interest payments and saves Cielo millions in debt payments without significant dilution of the company shares with an exceptional conversion strike price.
Don Allan, President and CEO of Cielo, stated, “We are truly happy to be able to announce that we are commencing a100% owned Cielo facility ahead of schedule. We have selected the area for the new facility and will start immediately on negotiating the purchase. The site is located close to both CN and CP Rail, major diesel refineries (clients) and feedstock supply. Purchasing the land now, provides Cielo the opportunity to begin engineering and permitting at the same time as the same work that is being done with Cielo’s partners in Dunmore, Alberta. To be able to purchase this land for cash and no mortgage allows Cielo the ability to choose numerous options to raise the $50 million for the construction of this facility and the extra money required to prepare the land. The plant will initially be engineered to produce annually approximately 33 million liters of high-grade renewable diesel which at todays prices is approximately CDN$55 million in annual revenues. The land is large enough to allow for multiple expansions. This Loan will also provide Cielo with the flexibility to assign the balance of the funds as needed, including for working capital. It is our intention to decrease our debt by repaying our largest secured lender in full. On February 23 rd , we had our first major sale of renewable diesel and now with Cielo buying the expansion land for cash and ahead of schedule, while clearing up its existing balance sheet, Cielo is having an amazing start to 2021 and is poised to continue strong growth on all fronts.
On behalf of the Board of Directors of the Company,
Cielo Waste Solutions Corp.
“ Don Allan ”
Don Allan, President / CEO / Director