Winnipeg, MB, April 29, 2020 – Ag Growth International Inc. (“AGI”) (TSX: AFN) today welcomed Farm Credit Canada (“FCC”) to its Canadian lending syndicate and announced several amendments to its credit facility.
AGI’s credit facility has been expanded to include a $50 million increase in its senior revolving facility as well as the creation of a separate one-year revolving facility of $50 million to provide increased short-term flexibility during the Covid-19 crisis. AGI’s senior credit facility now totals approximately $575 million Canadian dollar equivalent, excluding an undrawn accordion of $100 million. For reference, as at March 31, 2020 AGI had drawn $345 million under these facilities.
The amendments to the credit facility include a suspension of all financial covenant requirements for the six-month period ending October 31, 2020 as well as the ability to normalize Q1 2020 and Q2 2020 financial results for certain Covid-19 impacts when calculating trailing EBITDA in future covenant calculations. Following October 31, 2020, AGI’s minimum leverage ratio covenant will return to 3.75x up to and including the calculation as at March 31, 2021. The minimum leverage ratio decreases to 3.50x for the quarter ended June 30, 2021 and returns to 3.25x thereafter. During the financial covenant suspension period AGI is subject to a minimum liquidity covenant. The maturity date of the facility remains March 20, 2025. The amendments announced today do not impact terms of AGI’s Series B and C secured notes that total $60 million.
“We would like to thank our banking partners for their outstanding support during this crisis and we welcome FCC to our lending syndicate”, said Tim Close, President and CEO of AGI. “AGI remains in compliance with all financial covenants, all of our facilities are currently operating, our backlogs remain solid and we continue to monitor sales intake for areas of concern. In the early days of Covid-19 we moved quickly to engage our banking partners to account for the expected uncertainties created by the crisis. Given that the extent, depth and trailing impacts remain unknown it was prudent to implement measures to ensure AGI is well prepared. This amendment, in combination with our recently announced dividend change, is part of our Preparation with Progress initiative to prudently deal with the crisis while also progressing on strategic initiatives.”
AGI Company Profile
AGI is a leading provider of solutions for the global food infrastructure, including seed, fertilizer, grain, feed, and food processing systems. AGI has manufacturing facilities in Canada, the United States, the United Kingdom, Brazil, India, France and Italy 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.
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This press release contains references to "EBITDA", a financial measure that does not have a standardized meaning prescribed by International Financial Reporting Standards and that may not be comparable to similar measures presented by other companies or entities. References to "EBITDA" in this press release are to consolidated profit before income taxes, finance costs, depreciation, amortization and share of associate's net loss, as more particularly defined in AGI's credit facility. EBITDA is used in the credit facility to, among other things, measure AGI's compliance with certain financial covenants under the credit facility.