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Ag Growth launches $75 mln public offering of convertible debentures

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Ag Growth International (TSE:AFN) shares declined on Thursday, a day after the company said it has reached a deal for a $75 million public offering of convertible unsecured subordinated debentures. 

With a syndicate of underwriters co-led by TD Securities, National Bank Financial and CIBC, the maker of portable and stationary grain handling, storage and conditioning equipment will issue $75.0 million convertible unsecured subordinated debentures at a price of $1,000 each. 

Ag has also given underwriters an over-allotment option to buy up to an additional $11.25 million of debentures at the same price, which can be used at any time for a period of up to 30 days following closing.

The Winnipeg, Manitoba-based company, in a statement late Wednesday, said it plans to use the proceeds to partially fund the redemption of all of its outstanding 7% convertible unsecured debentures due in 2014. 

The new debentures, which can be converted into common shares of Ag at a price of 55 cents, will bear interest at 5.25% per year, payable semi-annually, beginning next June, with a maturity date of December 31, 2018.

The offering is expected to close December 17, subject to regulatory approvals, the company said. 

Ag Growth makes equipment such as augers, belt conveyors, grain storage bins, grain handling accessories, grain aeration equipment and grain drying systems. It has 11 manufacturing facilities in Canada, the United States, the United Kingdom and Finland.

Shares fell 0.4% in Toronto to $40.38 on Thursday morning. So far this year, the stock has climbed almost 29%. 

Quick facts: Ag Growth International Inc

Price: 26.52 CAD

TSX:AFN
Market: TSX
Market Cap: $496.15 m
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