Breaking News

Bayer to Focus Only on Life Sciences, Float Materialscience
Tweet TWEET

Apollo and Prospect Global Resources Enter into an Exclusivity Arrangement for a $100,000,000 Investment

Apollo and Prospect Global Resources Enter into an Exclusivity Arrangement for
                          a $100,000,000 Investment

PR Newswire

DENVER, Oct. 26, 2012

DENVER, Oct. 26, 2012 /PRNewswire/ --Prospect Global Resources Inc.
("Prospect Global" or the "Company") (NASDAQ: PGRX) announced today that it
has entered into an exclusivity arrangement with an affiliate of Apollo Global
Management, LLC (NYSE: APO) pursuant to which funds managed by APO ("Apollo")
would purchase $100,000,000 of newly issued 10% Convertible Second Lien Notes
(the "Notes"), expected to fund in the first half of 2013. Additionally,
Apollo would have an option to purchase 16.7 million shares of Prospect Global
common stock at an exercise price of $3.00 per share (exercisable any time
through the closing of the Notes transaction), which, if exercised, would
provide additional net proceeds to Prospect Global of $50,100,000. The
Company intends to use the proceeds from the Apollo financing to continue
development of its proposed potash mining facility being developed in
Holbrook, Arizona, by the Company's wholly-owned subsidiary, American West
Potash.

Under the securities purchase agreement currently under negotiation, Apollo
would purchase $100,000,000 in aggregate principal amount of Notes, with a
$3.00 initial conversion price. The Notes would have an annual interest rate
of 10%, of which 4% would be payable in cash and 6% payable in kind in
additional Notes. The Notes are intended to be convertible at any time by the
holders and can be converted by the Company upon completion of the Holbrook
project and Prospect Global's common stock trading above two times the
then-conversion price for a period of time. In addition to the securities
purchase agreement, the parties are negotiating a shareholders' agreement
which would provide for an expansion of the Board of Directors of Prospect
Global to nine members, including four directors appointed by Apollo and five
directors appointed by Prospect Global (including independent directors).

The closing of the Apollo financing is subject to, among other things,
satisfactory completion of negotiations with Apollo, the execution of
definitive documents, completion of a Bankable Feasibility Study (currently
expected in the first half of 2013) that satisfies certain conditions,
approval by the Company's shareholders, and other conditions necessary to
complete the transaction. Assuming the Note purchase closes and the option is
exercised, the remaining cost to complete the project and the retirement of
current debt is expected to be approximately $1.28 billion, the majority of
which is expected to be funded with senior project finance debt.

"Obtaining this financing will mark a significant milestone in our advancement
towards construction of our potash mine. Apollo is one of the world's largest
private equity firms, with significant experience in the natural resources and
agricultural sectors and has a history of successfully developing and
financing large-scale capital projects. We look forward to a successful
working relationship with Apollo as a long-term partner in the development of
our American West Potash project," said Pat Avery, President and Chief
Executive Officer.

Gareth Turner, Senior Partner of Apollo, said, "We believe American West
Potash is a world-class project and have been impressed with the vision and
capability of Prospect Global's management. We share in their ambition to
develop the first greenfield potash mine in the United States in over 30 years
and bring this highly strategic resource into production, thereby creating
thousands of jobs for American workers and providing significant benefits to
the local economy and the state of Arizona, as well as to farmers throughout
the world. We look forward to working with the Company on an exclusive basis
as we strive to complete the negotiation, documentation and closing of this
transaction."

With the exception of historical matters, the matters discussed in this press
release include forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from
projections or estimates contained herein. Such forward-looking statements
include statements regarding future discussions, negotiations and execution of
definitive agreements, as well as future sales of convertible notes, options
and common stock and the use of proceeds from such sales. Factors that could
cause actual results to differ materially from projections or estimates
include, among others, the parties' ability to negotiate and execute
definitive documents on the terms described herein, satisfaction of the
closing conditions, including the Company's ability to complete a Bankable
Feasibility Study that satisfies the conditions contemplated by this
investment, the outcome of future negotiations, as well as potash prices,
economic and market conditions, and the additional risks described in our
filings with the SEC, including our Annual Report on Form 10-K for the year
ended March 31, 2012. Most of these factors are beyond the Company's ability
to predict or control. The forward looking statements are made as of the date
hereof and, except as required under applicable securities legislation, the
Company does not assume any obligation to update any forward-looking
statements. Readers are cautioned not to put undue reliance on forward-looking
statements.

About Prospect Global Resources, Inc. [PGRX]:
Prospect Global Resources, Inc. is a Denver-based company engaged in the
exploration and development of a large, high-quality potash deposit located in
the Holbrook Basin of eastern Arizona.

About Apollo Global Management, LLC [APO]:
Apollo Global Management is a leading global alternative investment manager
with offices in New York, Los Angeles, Houston, London, Frankfurt, Luxembourg,
Singapore, Hong Kong and Mumbai. As of June 30, 2012, Apollo Global Management
had assets under management of approximately $105 billion in its private
equity, credit-oriented capital markets and real estate funds invested across
a core group of nine industries, including commodities, where Apollo has
considerable knowledge and resources. For more information about Apollo,
please visit www.agm.com.

SOURCE Prospect Global Resources, Inc.

Contact: Thomas Mulligan, Sitrick And Company, +1-212-573-6110
 
Press spacebar to pause and continue. Press esc to stop.