IKEA has extended the Company a €2.2 million (CA$3.2 million), 30 month, 1.9% fixed rate loan ("Loan") designated for the installation of equipment to support and expand CRAiLAR's European production facility and working capital for IKEA orders.
The Loan is to be secured by assets purchased with the proceeds as well as a portion of the secured assets used to secure the July 26, 2013 10% secured convertible debentures.
The IKEA General Supply Agreement provides for exclusivity in certain domestic textiles categories and requires minimum order quantities through 2019. CRAiLAR has already received orders and has begun flax fiber production for IKEA at its European production facility.
“A robust commercialization agreement together with financing from an iconic global customer is a major step for CRAiLAR as a brand, manufacturer and supplier" said Ken Barker, CEO. "We are very proud and humbled by this vote of confidence, and are excited to begin delivering CRAiLAR Flax fiber to consumers globally, while working with the largest home furnishings retailer in the world."
The Company has agreed to amend, in exchange for the release of secured assets, the conversion terms of its July 26, 2013 10.0% secured, subordinated convertible debentures (the "Debentures"); in the principal amount of$3,535,000; such that, at the holder's option, the Debentures may now be converted into common shares in the capital of the Company at $1.25 instead of $2.00 per Share.
Each of the proposed Loan and amended Debentures is subject to definitive documentation and TSX Venture Exchange approval prior to the completion thereof.
IKEA, the world's largest home furnishings retailer, was founded in 1943 in Sweden. Since that time, IKEA has offered home furnishings of good design, quality and function at low prices so the majority of people can afford them. There are currently more than 340 IKEA stores in 42 countries, including 38 in the U.S. IKEA incorporates sustainability into day-to-day business and supports initiatives that benefit children and the environment.
About CRAiLAR Technologies Inc.
CRAiLAR(R) Technologies Inc. offers cost-effective and environmentally sustainable natural fiber in the form of flax, hemp and other bast fibers for use in textile, industrial, energy, medical and composite material applications. Produced using a fraction of water and chemical inputs compared with other natural fibers, CRAiLAR Flax is the newest natural fiber introduction to the market in decades.
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