Agricore United

Agricore United

November 30, 2006 08:58 ET

Agricore United Announces Redemption of Convertible Debentures

WINNIPEG, MANITOBA--(CCNMatthews - Nov. 30, 2006) - Agricore United (TSX:AU) announced today its intention to fully redeem its outstanding 9% convertible unsecured subordinated debentures due November 30, 2007 (the "Debentures") on January 10, 2007 (the "Redemption Date"). The outstanding principal amount under the Debentures is $105 million. Pursuant to the trust indenture governing the Debentures, the Company will settle the principal amount of the Debentures by issuing and delivering Limited Voting Common Shares (the "Shares") and will settle any accrued and unpaid interest on the Debentures in cash.

The Company had previously announced in its second quarter report issued June 8, 2006 that it expected to exercise its option to redeem the Debentures in exchange for Shares. The redemption will improve the Company's leverage ratio and lower its interest costs for the 2007 fiscal year. Assuming no voluntary conversions prior to January 10, 2007, the Company will save $8.4 million in interest expense compared to what it would have paid through to the maturity of the Debentures on November 30, 2007.

The number of Shares to be issued pursuant to the redemption will be determined by dividing the principal amount of the outstanding Debentures on the Redemption Date by 95 percent of the volume weighted average trading price of the Shares on the Toronto Stock Exchange for 20 consecutive trading days ending on January 3, 2007. The Company will pay the cash equivalent value in lieu of issuing fractional Shares.

Holders of Debentures are reminded that they have the right to convert their Debentures at any time prior to 5:00pm (Toronto time) on January 9, 2007 at a conversion rate of 133.3333 Shares for each $1,000 principal amount of Debentures so converted.

Agricore United is one of Canada's leading agri-businesses with headquarters in Winnipeg, Manitoba and extensive operations and distribution capabilities across western Canada as well as operations in the United States and Japan. Agricore United uses its technology, services and logistics expertise to leverage its network of facilities and connect agricultural customers to domestic and international customers and suppliers. The company's operations are diversified into sales of crop inputs and services, grain merchandising, livestock production services and financial services. Agricore United's common shares are traded on the Toronto Stock Exchange under the symbol "AU".

Contact Information

  • Agricore United
    Shareholder Services Administration