AGT Food & Ingredients revamps debt, issues $190 million preferreds

By Devika Patel

Knoxville, Tenn., March 21 – AGT Food & Ingredients Inc. revised terms for a subsidiary’s credit facility and AGT’s high-yield debt, pushing maturities out to 2020 and 2021.

In addition, the company issued C$190 million of 99-year 5.375% no-call unsecured preferred securities that further strengthened the balance sheet.

“Maturities for Alliance Pulse Processors [Inc.'s] credit facilities and AGT’s C$200 million high-yield debt offering issue that was completed in late 2016 both have been extended to 2020 and 2021, respectively,” chief financial officer Lori Ireland said on the company’s fourth quarter and year ended Dec. 31, 2017 earnings conference call on Wednesday.

“In addition, the overall facility was reduced to C$400 million and an uncommitted accordion was added so that AGT is prepared for increased needs as the current cycle reverses,” Ireland said.

The company issued C$190 million of 5.375% unsecured preferred securities to Fairfax Financial Holdings Ltd., with a 99-year term.

“In August of 2017, AGT also completed a transaction with Fairfax for a 99-year no-call preferred securities in the amount of C$190 million,” Ireland said.

“This transaction provided capital that was utilized for the reduction of bank indebtedness,” Ireland said.

“The recent extension and amendment of our syndicated credit facility to 2020 and the Fairfax preferred security transaction gives us the balance sheet stability to capitalize on opportunities as the industry resets,” president and chief executive officer Murad Al-Katib said in a press release.

The preferred issue and the revised debt have improved the company’s balance sheet and liquidity.

“These transactions have helped to strengthen AGT’s balance sheet and liquidity,” Ireland said.

Adjusted EBITDA was C$15.6 million for the fourth quarter ended Dec. 31, 2017 compared to C$10.1 million for the third quarter ended Sept. 30, 2017.

Net debt decreased to C$473.3 million at Dec. 31, 2017, compared to C$538.7 million at Dec. 31, 2016.

AGT is a Regina, Sask. 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.

© 2015 Prospect News.
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