Eric Fier, the chief executive officer of SilverCrest Metals Inc., says he’s “surprised” and “disappointed” that National Bank Financial Inc. walked away from a recent financing agreement, as the silver company considers taking legal action against the investment bank.
Earlier in the month, National Bank informed SilverCrest that it was invoking the “disaster out” clause to terminate a $75-million bought deal, citing the extraordinary financial turmoil created by COVID-19.
Although rarely used, disaster out clauses can be invoked by underwriters in extreme situations to walk away from their legal obligations in a bought deal.
“We’re long-term clients of National Bank,” Mr. Fier said. “I’m very disappointed in the lack of support in this situation and their unwillingness to stand by a key client when the going gets tough.”
Mr. Fier said that National Bank has no right to invoke the legal out in this instance, saying all parties entered into the financing agreement with their “eyes wide open” about the elevated risks around COVID-19.
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