Ag Growth International Inc. (TSX:AFN) ("AGI" or the "Company") is pleased to announce the establishment of a new financing structure to support qualified local Commercial customers on large scale grain storage and handling projects supplied by AGI Brazil.
The arrangement is set up as an investment fund (or "Fund"), a commonly used financing structure leveraged by a variety of industries throughout Brazil. The Fund is designed to monetize eligible long-term receivables arising from AGI Brazil's Commercial projects. The first tranche of the Fund will have a target capacity of up to approximately BRL 1.2 billion, equivalent to roughly CAD $300 million, with room for further expansion of the total size of the Fund in the future as conditions warrant. This Fund is new and separate from the fund initiative previously announced in early 2024 which targeted Farm segment customers in Brazil.
"Our strategic focus on developing the international Commercial market continues to be a key priority for AGI, with activity in Brazil leading the way," commented Paul Householder, CEO & President of AGI. "With expanded capabilities, products, and resources, we've seen a significant increase in the size and scale of projects AGI has bid on, won, and delivered in Brazil. The Fund structure enables AGI to participate in a wider variety of projects and creates an additional competitive advantage for us within the Brazilian market. Overall, today's announcement serves to help facilitate the build-out of much needed grain storage and handling infrastructure in this vital agricultural region."
"With the new Fund structure now setup, we will begin transferring long-term receivables for projects AGI Brazil has financed up to this point," noted Jim Rudyk, CFO of AGI. "Over the next few months, and subject to completing the required administrative and regulatory steps, we anticipate being able to monetize approximately CAD $100 million in long-term receivables using the Fund structure, with cash proceeds to be immediately applied to our balance sheet. With approximately CAD $200 million of remaining capacity in this new Commercial focused investment Fund, we will be able to streamline the financing process much more efficiently for future projects, all while optimizing AGI's working capital position. This differentiated capability provides value to our customers and enables AGI to more effectively support and deliver large scale projects all across Brazil."
Company Profile
AGI is a provider of the equipment and solutions required to support the efficient storage, transport, and processing of food globally. AGI has manufacturing facilities in Canada, the United States, Brazil, India, France, and Italy and distributes its product worldwide.
No Offer / Brazil notice. This press release is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities in Brazil, Canada, or any other jurisdiction. Any offering of securities in Brazil will be conducted in compliance with applicable Brazilian securities laws, including CVM Resolution 160, without the use of public advertising, and will not be made to the general investing public.
Forward-Looking Information. This release contains forward-looking information ("FLI") within the meaning of applicable Canadian securities laws, including statements regarding the potential monetization of our long-term receivables (including the target capacity of the Fund, the amount of receivables that we anticipate monetizing over the next few months, and our intention to apply monetized receivables to our balance sheet), and the expected benefits of the Fund for AGI, including our ability to streamline the financing process for future projects while optimizing our working capital position. Forward-looking information is based on a number of factors and assumptions, including, inter alia, favorable market conditions in Brazil, availability and cost of third-party funding; successful structuring, approvals and documentary satisfaction of the framework (including and eligibility/transferability of receivables); timely completion of required consents/registrations/filings; customer payment performance and receivables enforceability; stable interest rates, FX, and inflation; consistent tax/accounting treatment (including derecognition/consolidation); sufficient liquidity/covenant headroom; and AGI's operational readiness; and customer demand in Brazil. FLI is typically identified by words such as "anticipate," "believe," "expect," "intend," "may," "plan," "potential," "project," "should," "target," "will," and similar expressions and grammatical variations. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. Although AGI believes that the factors and assumptions on which the FLI are based are reasonable, undue reliance should not be placed on the forward-looking information because AGI can give no assurance that they will prove to be correct. Since FLI addresses future events and conditions, by its very nature it involves inherent risks and uncertainties, most of which are beyond AGI's control. Actual results could differ materially from those currently anticipated due to a number of risks and uncertainties, including any legal changes, delay in completing or inability to complete required administrative and regulatory steps, accounting/tax outcomes differing from expectations, macroeconomic/political conditions in Brazil; and reputational/compliance risks, including restrictions on public communications during any distribution period, and financing, regulatory, market and operational risks or constraints in Brazil. See AGI's most recently filed management's discussion and analysis and annual information form for additional risk factors, which are available on SEDAR+ at www.sedarplus.ca. This FLI is made as of the date of this release and AGI disclaims any intention or obligation to update publicly such information except as required by law. The FLI contained in this release is expressly qualified by this cautionary statement.
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For More Information:
Andrew Jacklin
Sr Director, Investor Relations
+1-437-335-1630
investor.relations@aggrowth.com
