pcJ News Briefs – AGT Food and Ingredients Inc. (TSX: AGT) has closed previously announced $190 million financing with Fairfax Financial Holdings Limited.
Fairfax has purchased, on a private placement basis, preferred securities in an aggregate amount of $190 million. The Preferred Securities are unsecured obligations of the Company, will mature in 99 years and will be guaranteed by certain of AGT’s subsidiaries. AGT has also issued 5,714,286 warrants, each exercisable to acquire one common share in the capital of AGT at a price of $33.25 per share for a period seven years.
If the warrants are fully exercised, Fairfax would own approximately 19.07% of the currently issued and outstanding common shares of AGT. Prior to the transaction described above, Fairfax did not own any securities of AGT.
AGT and Fairfax Close Strategic Investment Transaction
REGINA, AUG 31 2017 – AGT Food and Ingredients Inc. (TSX: AGT) (“AGT” or the “Company”) is pleased to announce that it has successfully closed its previously announced transaction (the “Transaction”) with Fairfax Financial Holdings Limited, through certain subsidiaries (collectively, “Fairfax”), pursuant to which Fairfax has agreed to invest C$190 million in AGT in exchange for the issuance by AGT of 5.375% interest bearing securities (the “Preferred Securities”) and common share purchase warrants (the “Warrants”).
Pursuant to the Transaction, Fairfax has purchased, on a private placement basis, Preferred Securities in an aggregate amount of C$190 million. The Preferred Securities are unsecured obligations of the Company, will mature in 99 years and will be guaranteed by certain of AGT’s subsidiaries. AGT has also issued 5,714,286 Warrants, each exercisable to acquire one common share in the capital of AGT (a “Common Share”) at a price of C$33.25 per share for a period seven years. AGT can also elect to require early exercise of the Warrants if the five day volume weighted average closing price of its Common Shares on the Toronto Stock Exchange reaches C$53.20 at any time after the fifth anniversary of the closing of the Transaction. The securities issued pursuant to the Transaction are subject to a hold period which will expire four months and one day from the date of closing, being January 1, 2018.
Fairfax will have the right to nominate one independent director to the board of directors of AGT and will become entitled to nominate an additional independent director upon the exercise of all of the Warrants. The proceeds raised from the Transaction will be used by AGT for immediate repayment of debt, future growth initiatives and general corporate purposes.
If the Warrants are fully exercised, Fairfax would own approximately 19.07% of the currently issued and outstanding common shares of AGT. Prior to the transaction described above, Fairfax did not own any securities of AGT.
The aforementioned securities were acquired by Fairfax for investment purposes and in the future, it may discuss with management and the board of directors of AGT any of the transactions listed in clauses (a) to (k) of item 5 of 62-103F1 and may further purchase, hold, vote, trade, dispose or otherwise deal in the securities (including any common shares received on exercise of the Warrants) in such manner as it deems advisable to benefit from changes in market prices of such securities, publicly disclosed changes in the operations of AGT, its business strategy or prospects or from any material transaction involving AGT.
An early warning report will be filed by Fairfax in accordance with applicable securities laws and will be available on SEDAR at www.sedar.com or may be obtained directly from Fairfax upon request at 416-367-4941 (Attention: John Varnell, Vice President, Corporate Development) or at Fairfax Financial Holdings Limited, 95 Wellington Street West, Suite 800, Toronto, Ontario M5J 2N7.
Cormark Securities Inc. acted as financial advisor to AGT in connection with the Transaction.
About AGT Food and Ingredients Inc.
AGT Food and Ingredients Inc. (AGT) is a processor of value-added pulses, staple foods and ingredients for export and domestic markets as well as a supplier of retail packaged and canned foods to retail and food service sectors. Through its offices and processing facilities located in some of the best agricultural growing regions in Canada, the U.S., Turkey, China, Australia and South Africa, merchandising and sales offices in the U.K., the Netherlands, Spain, Switzerland and India and origination offices in Russia, AGT produces a full range of pulses and specialty crops including lentils, peas, chickpeas, beans and canary seed as well as food ingredients such as pulse flours, proteins, starches and fibres. Through its subsidiaries in Turkey, the Arbel Group, AGT also produces staple foods such as Arbella Pasta, rice, and milled wheat products, including bulgur and semolina.
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