NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
WINNIPEG, MB, November 27, 2013 – Ag Growth International Inc. (TSX: AFN) (“AGI” or the “Company”) announced today that it has reached an agreement with a syndicate of underwriters co-led by TD Securities Inc., National Bank Financial Inc. and CIBC (the “Underwriters”), pursuant to which AGI will issue on a “bought deal” basis, subject to regulatory approval, $75,000,000 aggregate principal amount of convertible unsecured subordinated debentures (the “Debentures”) at a price of $1,000 per Debenture. AGI has also granted to the Underwriters an over-allotment option to purchase up to an additional $11,250,000 aggregate principal amount of Debentures at the same price, exercisable in whole or in part at any time for a period of up to 30 days following closing of the offering, to cover over-allotments.
AGI intends to use the net proceeds from the offering to partially fund the redemption of all of the Company’s outstanding 7.00% convertible unsecured subordinated debentures due 2014 (the “7.00% Debentures”). AGI expects to provide formal notice of the redemption to holders and the trustee of the 7.00% Debentures upon closing of the offering. As the indenture governing the 7.00% Debentures requires that 30 days’ notice of the redemption be given, AGI intends to initially use a portion of the net proceeds of the offering to repay indebtedness under its credit facility, which will then be available to fund the redemption upon expiry of the 30 day notice period.
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, 2014. The Debentures will have a maturity date of December 31, 2018 (the “Maturity Date”).
The Debentures will be convertible at the holder’s option at any time prior to the close of business on the earlier of the business day immediately preceding the Maturity Date and the date specified by AGI for redemption of the Debentures into fully paid and non-assessable common shares (“Common Shares”) of the Company at a conversion price of $55.00 per Common Share, being a conversion rate of approximately 18.1818 Common Shares for each $1,000 principal amount of Debentures.
The Debentures will not be redeemable by the Company on or before December 31, 2016. On and after December 31, 2016 and prior to December 31, 2017, the Debentures may be redeemed in whole or in part from time to time at AGI’s option, provided that the volume weighted average trading price of the Common Shares on the TSX for the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of the redemption is given is not less than 125% of the Conversion Price. On and after December 31, 2017, the debentures may be redeemed in whole or in part from time to time at AGI’s option at a price equal to their principal amount plus accrued interest.
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 December 17, 2013. The Offering is subject to normal regulatory approvals, including approval of the TSX.
The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction.
Ag Growth International Inc. is a leading manufacturer of portable and stationary grain handling, storage and conditioning equipment, including augers, belt conveyors, grain storage bins, grain handling accessories, grain aeration equipment and grain drying systems. AGI has eleven manufacturing facilities in Canada, the United States, the United Kingdom and Finland, and distributes its products globally.
This press release contains certain forward-looking statements ("forward-looking statements") within the meaning of applicable Canadian securities laws. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "expect", "may", "will", "project", "should" or similar words suggesting future outcomes. 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 and redemption of the 7.00% Debentures.
These statements are 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 included in AGI's annual information form and other reports on file with Canadian securities regulatory authorities which can be accessed through the SEDAR website at www.sedar.com. AGI assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason, other than as required by applicable securities laws. In the event AGI does update any forward-looking statement, no inference should be made that it will make additional updates with respect to that statement, related matters, or any other forward-looking statement.