Premium Brands Holdings Corporation
TSX : PBH

Premium Brands Holdings Corporation

December 08, 2010 08:01 ET

Premium Brands Holdings Corporation Announces $50,000,000 Financing of 5.75% Convertible Unsecured Subordinated Debentures

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 8, 2010) - 

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.

Premium Brands Holdings Corporation ("Premium Brands" or the "Company") (TSX:PBH), a leading producer, marketer and distributor of branded specialty food products, announced today that it has reached an agreement with a syndicate of underwriters co-led by National Bank Financial Inc. and Scotia Capital Inc. (the "Underwriters"), pursuant to which the Company will issue on a "bought-deal" basis, subject to regulatory approval, $50,000,000 aggregate principal amount of convertible unsecured subordinated debentures (the "Debentures") at a price of $1,000 per Debentures (the "Offering"). The Company has granted to the Underwriters an over-allotment option to purchase up to an additional $7,500,000 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. The Company intends to use the net proceeds from the Offering to reduce indebtedness, for future acquisitions and for general corporate purposes.

The Debentures will bear interest from the date of issue at 5.75% per annum, payable semi-annually in arrears on June 30 and December 31 each year commencing June 30, 2011. The Debentures will each have a maturity date of December 31, 2015 (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 the Company for redemption of the Debentures into common shares at a conversion price of $22.40 per common share, being a conversion rate of 44.6429 common shares for each $1,000 principal amount of Debentures.

Closing of the Offering is expected to occur on or about January 13, 2011. The Offering is subject to normal regulatory approvals, including approval of the Toronto Stock Exchange. The Debentures will be offered in each of the provinces of Canada by way of a short form prospectus, and by way of private placement in the United States to Qualified Institutional Buyers pursuant to Rule 144A.

About Premium Brands

Premium Brands owns a broad range of leading specialty food manufacturing and differentiated food distribution businesses with operations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Washington State. The Company services over 25,000 customers and its family of brands and businesses include Grimm's, Harvest, McSweeney's, Bread Garden Express, Hygaard, Hempler's, Quality Fast Foods, Gloria's Best of Fresh, Harlan Fairbanks, Creekside Bakehouse, Centennial Foodservice, B&C Foods, Duso's Fine Foods, Maximum Seafood, SK Food Group and Hub City Fisheries.

Forward-Looking Statements

This press release includes forward looking statements with respect to Premium Brands, including its business operations strategy and financial performance and condition. These statements generally can be identified by the use of forward looking words such as "may", "could", "should", "would", "will", "expect", "intend", "plan", "estimate", "project", "anticipate", "believe" or "continue", or the negative thereof or similar variations. Although management believes that the expectations reflected in such forward looking statements are reasonable and represent Premium Brands' internal expectations and belief as of December 8, 2010, such statements involve unknown risks and uncertainties beyond Premium Brands' control which may cause its actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward looking statements.

Important factors that could cause actual results to differ materially from Premium Brands' expectations include, among other things: (i) seasonal and/or weather related fluctuations in its sales; (ii) changes in consumer discretionary spending resulting from changes in economic conditions and/or general consumer confidence levels; (iii) changes in the cost of raw materials used for its products; (iv) changes in the cost of products sourced from third party manufacturers and sold through Premium Brands' proprietary distribution networks; (v) changes in Canadian income tax laws; (vi) changes in consumer preferences for food products; (vii) competition from other food manufacturers and distributors; (viii) new government regulations affecting Premium Brands' business and operations; (ix) the inability to realize anticipated tax attributes associated with its recent conversion to a corporation; (x) exposure to third party credit/contractual risk and operational risk relating to its recent conversion to a corporation; and (xi) other factors as discussed in Premium Brands' Management's Discussion and Analysis for 2009, which is filed electronically through SEDAR and available online at www.sedar.com. It should be noted that this list of important factors affecting forward looking information may not be exhaustive. Unless otherwise indicated, the forward looking information in this document is made as of December 8, 2010 and, except as required by applicable law, will not be publicly updated or revised. This cautionary statement expressly qualifies the forward looking information in this document.

Contact Information

  • Premium Brands Holdings Corporation
    George Paleologou
    President and CEO
    (604) 656-3100
    or
    Premium Brands Holdings Corporation
    Will Kalutycz
    CFO
    (604) 656-3100
    www.premiumbrandsholdings.com