Burcon NutraScience Corporation announced that it has signed a term sheet with its largest shareholder with respect to a proposed credit facility of up to $10 million.
The developer of plant-based proteins technologies said proceeds from the facility are expected to be used to support Burcon's partnership discussions for its plant-based protein technologies, continued research and development of the company's protein extraction and purification platform, further strengthening of Burcon's intellectual property portfolio and for other general corporate purposes.
“This support from our major shareholder comes at an opportune time and will provide us the financial leeway to capitalize on additional commercialization opportunities,” Burcon NutraScience interim CEO Peter Kappel said in a statement.
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Burcon noted the term sheet, which is being provided by lender Large Scale Investments Limited, a wholly-owned subsidiary of Firewood Elite Limited, will be made available in two $5 million tranches and is expected to be secured by certain assets of Burcon.
It added that Firewood is wholly owned by Alan Chan, a Burcon director, who currently holds about 21% of Burcon’s outstanding common shares.
The credit facility will be subject to approval of the Toronto Stock Exchange and other closing conditions customary for a loan transaction of this nature, the company said.
As well, Burcon reported that it has advanced a $3.16 million loan from its treasury to its joint venture, Merit Functional Foods Corporation, which represents Burcon's proportionate share of a $10 million financing provided by all shareholders of Merit.
The company said the financing is intended to address liquidity requirements of Merit as it ramps up production and sales at its state-of-the-art pea and canola protein production facility.
The Merit Loan has a term of 15 years and will initially be non-interest-bearing and have terms similar to previously advanced shareholder loans, Burcon noted.
Burcon is a global technology leader in the development of plant-based proteins for foods and beverages. With over two decades of experience formulating high-purity proteins that have superior functionality, taste and nutrition, the company has amassed an extensive patent portfolio covering its novel plant-based proteins derived from pea, canola, soy, hemp, sunflower seed, among other plant sources.
Contact Sean at sean@proactiveinvestors.com