Ag Growth International Inc.

Ag Growth International Inc.

October 05, 2009 08:05 ET

Ag Growth Announces $100,000,000 Public Offering of Convertible Unsecured Subordinated Debentures

WINNIPEG, MANITOBA--(Marketwire - Oct. 5, 2009) -


Ag Growth International Inc. ("Ag Growth")(TSX:AFN) announced today that it has reached an agreement with a syndicate of underwriters led by TD Securities Inc. and including CIBC, National Bank Financial Inc., Cormark Securities Inc., Wellington West Capital Markets Inc. and Genuity Capital Markets (collectively, the "Underwriters"), pursuant to which Ag Growth will issue on a "bought deal" basis, subject to regulatory approval, $100,000,000 aggregate principal amount of convertible unsecured subordinated debentures (the "Debentures") at a price of $1,000 per Debenture. Ag Growth has also granted to the Underwriters an over-allotment option to purchase up to an additional $15,000,000 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. Ag Growth intends to use the net proceeds from the Offering to repay debt and for general corporate purposes. The Debentures will bear interest from the date of issue at 7.0% per annum, payable semi-annually in arrears on June 30 and December 31 each year commencing June 30, 2010. The Debentures will have a maturity date of December 31, 2014 (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 Maturity Date and the business day immediately preceding the date specified by Ag Growth for redemption of the Debentures into fully paid and non-assessable common shares ("Common Shares") of Ag Growth at a conversion price of $44.98 per Common Share, being a conversion rate of approximately 22.2321 Common Shares for each $1,000 principal amount of Debentures.

The Debentures will not be redeemable by Ag Growth on or before December 31, 2012. On and after December 31, 2012 and prior to December 31, 2013, the Debentures may be redeemed in whole or in part from time to time at Ag Growth's option, provided that the volume weighted average trading price of the Common Shares on the TSX on 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, 2013, the debentures may be redeemed in whole or in part from time to time at Ag Growth's option at a price equal to their principal amount plus accrued interest.

Closing of the Offering is expected to occur on or about October 27, 2009. 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.

Company Profile

Ag Growth is a leading manufacturer of portable and stationary grain handling, storage and conditioning equipment, including augers, belt conveyors, grain storage bins, grain handling accessories and grain aeration equipment. Ag Growth's sales, marketing, and distribution system is comprised of approximately 1,400 dealers and distributors that distribute product in 48 states, nine provinces, and overseas.

Forward-Looking Statements

This press release contains certain forward-looking statements and forward-looking information ("forward-looking information") within the meaning of applicable Canadian securities laws. Forward-looking information is 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 information relating to the proposed timing of completion of the offering. Ag Growth believes the expectations reflected in such forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking information should not be unduly relied upon.

Forward-looking information is based on various assumptions. Those assumptions are based on information currently available to Ag Growth, including information obtained from third party sources and include the historic performance of Ag Growth's businesses, current economic trends, utilization of tax basis, currency, exchange and interest rates, trading data and cost estimates. You are cautioned that the preceding list of assumptions is not exhaustive.

Forward-looking information is not a guarantee of future performance and involves a number of risks and uncertainties some of which are described herein. Such forward-looking information necessarily involves known and unknown risks and uncertainties, which may cause Ag Growth's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking information. These risks and uncertainties include but are not limited to the risks identified in the most recent Annual Information Form of Ag Growth's predecessor, Ag Growth Income Fund, under the heading "Risk Factors". Without limitation, the amount of cash dividends to be paid on the Ag Growth common shares, if any, in the future will be subject to the discretion of the board of directors and may vary depending on a variety of factors, including the prevailing economic and competitive environment, results of operations, fluctuations in working capital, Ag Growth's ability to raise capital, the amount of capital expenditures and other conditions existing from time to time. There can be no guarantee that Ag Growth will maintain its current dividend policy. Any forward-looking information is made as of the date hereof and, except as required by law, Ag Growth assumes no obligation to publicly update or revise such information to reflect new information, subsequent or otherwise.

Contact Information

  • Ag Growth International Inc.
    Steve Sommerfeld
    Investor Relations
    (204) 489-1855