August 25, 2016 17:56 ET
VADODARA, INDIA--(Marketwired - Aug. 25, 2016) - Gujarat State Fertilizers and Chemicals Limited ("GSFC") has been made aware of certain incorrect and misleading statements that have been made on certain online blogs in respect of GSFC and the proposed financing transaction involving GSFC and Karnalyte Resources Inc. ("KRN"). GSFC wishes to provide information in order to clarify these incorrect statements.
GSFC's only desire has been to bring the construction and development of the Wynyard Potash project (the "Wynyard Project") to fruition. The financing package that was put forward by GSFC, and to this day remains available should KRN wish to pursue same, is based on a variety of concessions designed to provide value to all shareholders of KRN at the expense of GSFC, including:
It should be further noted the financing package sourced by GSFC was to be through a syndicate of Indian financial institutions, who have their own requirements for any project financing, including to ensure the financial viability of the Wynyard Project in a variety of commodity price scenarios in order to ensure comfortable repayment of the project debt. GSFC has spent considerable time and effort negotiating an extremely favourable financing package that is not available to KRN from any other financing provider in the current climate, nor was available to KRN even when the market conditions were much more favourable than today. This is largely on the basis of GSFC guaranteeing the entire project debt. Lastly, GSFC has never had any issues disclosing the terms of the proposed financing to any shareholders. GSFC has only complied with the disclosure obligations it has understood that KRN has under applicable securities laws. It is not for GSFC to determine what should or should not be disclosed to shareholders of KRN, this is a matter for the management and finance committee of KRN to determine. GSFC will be pleased to provide details of the proposed financing package at the request of any shareholder, and shareholders may make their own determination as to the fairness of such proposal.
GSFC believes that the Project will create significant value for the region of Saskatchewan and the shareholders of Karnalyte. However, if KRN does not wish to pursue the financing package once the details are known to all shareholders, this is perfectly acceptable to GSFC. GSFC wishes continued success to Karnalyte's management in seeking alternative financing to fund the construction and development of the Wynyard Project and shall continue to extend all reasonable co-operation as may be sought.
GSFC is a professionally managed organization with a net worth of approximately 1 billion USD. The Government of Gujarat is its largest single shareholder and Mr A K Tiwari, an experienced bureaucrat from the Indian Administrative Services, with remarkable credentials is at its helm. It has been in existence and operations for more than 50 years and has been credited with several path breaking achievements in implementing large scale industrial projects.
Gujarat State Fertilizers and Chemicals Limitedkrnshareholder@gsfcltd.com
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