AGI announces $75 million offering of senior subordinated unsecured debentures and intention to redeem outstanding debentures due 2020

Winnipeg, MB, October 30, 2019 – Ag Growth International Inc. (TSX: AFN) (“AGI” or the “Company”) announced today that it has reached an agreement with a syndicate of underwriters led by CIBC Capital Markets, National Bank Financial Inc., RBC Capital Markets and Scotiabank (the “Underwriters”), pursuant to which AGI will issue on a “bought deal” basis, subject to regulatory approval, $75,000,000 aggregate principal amount of senior subordinated unsecured debentures (the “Debentures”) at a price of $1,000 per Debenture (the “Offering”). AGI has also granted to the Underwriters an over-allotment option, exercisable in whole or in part for a period expiring 30 days following closing, to purchase up to an additional $11,250,000 aggregate principal amount of Debentures at the same price. If the over-allotment option is fully exercised, the total gross proceeds from the Offering to AGI will be $86,250,000.

AGI intends to redeem in full the Company’s 5.00% Convertible Unsecured Debentures due December 31, 2020 (the “2020 Debentures”). The Company intends to provide a formal notice of redemption to the holders of 2020 Debentures in accordance with the terms of the indenture governing the 2020 Debentures.. The net proceeds of the Offering will initially be used to repay a portion of the Company's revolving bank debt which will then be redrawn to fund the redemption of the 2020 Debentures and, to the extent any 2020 Debentures have been converted to common shares and are therefore not to be redeemed or the over-allotment option has been exercised, the resulting remaining or additional proceeds will be used for general corporate purposes.

A preliminary short form prospectus qualifying the distribution of the Debentures will be filed with the securities regulatory authorities in each of the provinces of Canada (other than Quebec). Closing of the Offering is expected to occur on or about November 19, 2019. The Offering is subject to normal regulatory approvals, including approval of the Toronto Stock Exchange.

The Debentures will bear interest from the date of issue at 5.25% per annum, payable semi-annually in arrears on June 30 and December 31 each year commencing June 30, 2020. The Debentures will have a maturity date of December 31, 2024.

The Debentures will not be redeemable by the Company before December 31, 2022, except upon the occurrence of a change of control of the Company in accordance with the terms of the indenture (the "Indenture") governing the Debentures. On and after December 31, 2022 and prior to December 31, 2023, the Debentures may be redeemed at the Company’s option at a price equal to 102.625% of their principal amount plus accrued and unpaid interest. On or after December 31, 2023, the Debentures will be redeemable at the Company’s option at a price equal to their principal amount plus accrued and unpaid interest.

The Company will have the option to satisfy its obligation to repay the principal amount of the Debentures due at redemption or maturity by issuing and delivering that number of freely tradeable common shares in accordance with the terms of the Indenture.

The Debentures will not be convertible into common shares of the Company at the option of the holders at any time.

This press release is not an offer of Debentures for sale in the United States. The Debentures may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended, or an exemption from such registration. The Company has not registered and will not register the Debentures under the U.S. Securities Act of 1933, as amended. The Company does not intend to engage in a public offering of Debentures in the United States. This press release shall not constitute an offer to sell, nor shall there be any sale of, the Debentures in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Company Profile

AGI is a leading provider of equipment solutions for agriculture bulk commodities including seed, fertilizer, grain, feed and food processing systems. AGI has manufacturing facilities in Canada, the United States, the United Kingdom, Brazil, France, Italy and India, and distributes its product globally.

Further information can be found in the disclosure documents filed by AGI with the securities regulatory authorities, available at www.sedar.com and on AGI's website www.aggrowth.com.

For More Information Contact:

Investor Relations
Steve Sommerfeld
204-489-1855
steve@aggrowth.com

Forward-Looking Information

This news release contains forward-looking information within the meaning of applicable securities laws that reflects our expectations regarding the future growth, results of operations, performance, business prospects, and opportunities of the Company. Forward-looking information may contain such words as “anticipate”, “believe”, “continue”, “could”, “expect”, “intend”, “plan”, “will” or similar expressions suggesting future conditions or events. In particular, this press release includes forward-looking statements relating to the proposed timing of completion of the Offering and the anticipated use of the net proceeds of the Offering. Such forward-looking information is based on current expectations that involve a number of risks and uncertainties which could cause actual results to differ from those anticipated. These risks include, but are not limited to, the failure or delay in satisfying any of the conditions to the completion of the Offering. Additional information on these and other factors that could affect AGI's operations, financial results or dividend payments are described under “Risks and Uncertainties” and "Forward-Looking Information" in our most recently filed Management's Discussion and Analysis and Annual Information Form. These factors should be considered carefully, and readers should not place undue reliance on the Company’s forward-looking information. We cannot assure readers that actual results will be consistent with this forward-looking information and we undertake no obligation to update such information except as expressly required by law.

 

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