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Saskatchewan Wheat Pool directors approve recapitalization, early conversion of notes
New York, Feb. 8 - Saskatchewan Wheat Pool said its board of directors approved a recapitalization plan that includes early conversion of its convertible subordinated notes.
The plan is in line with the announcement in December.
Under the recapitalization:
* The Pool's C$173 million of convertible subordinated notes will be converted early into new common shares at the rate of 131.6 million new common shares per C$1,000 principal amount. The rate is equivalent to 2,632 B shares compared to the current conversion ratio of 2,227;
* The existing class A voting shares and class B non-voting shares will be combined into a single class of new common stock. A shares will be exchanged for 3.62 new common shares or C$25 in cash. B shares will be exchanged at the rate of one new share for 20 B shares;
* The Pool will carry out a C$150 million rights offering to shareholders following completion of the exchange of convertibles; C$100 million of the proceeds will be used to reduce debt and the rest for general corporate purposes.
"The plan approved today [Monday] will position the Pool to raise equity in the public markets to further reduce debt and enhance liquidity," said chief executive officer Mayo Schmidt, in a news release.
The Pool has lock up agreements with holders of 37.7% of the convertibles to support the plan. A meeting of noteholders will be held on March 23 to approve the recapitalization.
The rights offering will be backstopped by a syndicate led by BMO Nesbitt Burns.
Saskatchewan Wheat Pool is a Regina, Saskatchewan-based grain handling and agricultural marketing network.
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