TORONTO , Sept. 15 - Alliance Grain Traders Income Fund (TSX-V: AGT.UN) (the "Fund") is pleased to announce the completion of (i) the previously announced conversion of the Fund on a tax deferred basis from an open-ended unit trust to a dividend-paying corporation (the "Conversion"), and (ii) the previously announced acquisition ("Acquisition") of Arbel Bakliyat Hububat Sanayi ve Ticaret A.S., Durum Gida Sanayi ve Ticaret A.S., and Turkpulse Dis Ticaret A.S. (collectively, the "Arbel Group") by Alliance Grain Traders Inc. ("AGTI").
As a result of the Conversion, all of the outstanding units of the Fund ("Units") are now owned by AGTI, which was originally a wholly-owned subsidiary of the Fund incorporated for this purpose. All of the holders of outstanding Units have been issued common shares of AGTI ("Common Shares") on the basis of one Common Share for each Unit. AGTI also acquired all of the outstanding exchangeable shares of the Fund's operating subsidiary, Alliance Pulse Processors Inc. ("Alliance") in exchange for Common Shares on the basis of one Common Share for each exchangeable share. The outstanding incentive options of the Fund have been exchanged for options to acquire an equal number of Common Shares on the same terms as under the Fund's incentive options.
Pursuant to the Acquisition, AGTI acquired all of the outstanding shares of the Arbel Group for an aggregate purchase price of CDN$104,141,400, of which CDN$60,097,988 was paid in cash and CDN$44,043,412 was paid by the issuance of 2,850,448 Common Shares at a deemed price of CDN$15.4514 per Common Share. 10% of the purchase price (including both cash and shares) have been held back in escrow as security for any claims for indemnity which AGTI may make against the former principal shareholders of the Arbel Group Companies. All of the remaining Common Shares issued pursuant to the Acquisition have been placed in escrow for a period of two years, with 25% to be released every six months.
Pursuant to the Acquisition, Huseyin Arslan, a trustee of the Fund and the Executive Chairman of AGTI, acquired ownership of an additional 1,179,218 Common Shares, which, together which the Common Shares he received pursuant to the Conversion, results in him owning 2,334,796 Common Shares, being approximately 13.4% of the Common Shares outstanding immediately after the completion of the Conversion and the Acquisition. Pursuant to the Acquisition, Mahmut Arslan, a senior officer of the Arbel Group Companies, acquired ownership of an additional 1,311,858 Common Shares, which, together which the Common Shares he received pursuant to the Conversion, results in him owning 1,989,636 Common Shares, being approximately 11.7% of the Common Shares outstanding immediately after the completion of the Conversion and the Acquisition.
The Common Shares have been approved for listing on the Toronto Stock Exchange (the "TSX") and will commence trading on the TSX under the symbol "AGT" as of the opening of business on September 18, 2009 . Until then, the Common Shares will continue to be listed and traded on the TSX Venture Exchange (the "TSXV") in the guise of Units under the symbol "AGT.UN". Persons buying Units during the period from September 15 to September 17, 2009 will receive Common Shares upon settlement. The Units will be delisted from the TSXV at the close of business on September 17, 2009.
Genuity Capital Markets acted as sole financial advisor to the Fund with respect to the Acquisition, the Conversion and a review of strategic and financing alternatives available to the Fund.
About AGTI
AGTI will act as the holding company for the businesses formerly carried on by the Fund and the Arbel Group.
The Fund was an income trust which derives its income from the operations of its operating subsidiary, Alliance. Alliance, on its own and through its subsidiaries, is engaged in the business of sourcing and processing (cleaning, splitting, sorting and bagging) specialty crops, primarily for export markets. Alliance and its subsidiaries in Canada , U.S. and Australia handle the full range of pulses and specialty crops including lentils, peas, chickpeas, beans and canary seed through six processing plants. AGTI expects to wind up the Fund in the near future so that Alliance will become a direct wholly-owned subsidiary of AGTI.
The Arbel Group has a 50-year operating history and has grown to become a leading processor of pulses and grains and a leading exporter of pulses and pasta in Turkey. The Arbel Group operates state-of-the-art processing and production facilities in Mersin, Turkey . From its hub in Turkey , the Arbel Group currently exports to over 50 countries in Asia, Africa, Europe and the Americas. AGTI intends to keep the current management and business operations of the Arbel Group Companies as they are.
Cautionary Statements
Certain statements in this press release are forward-looking statements. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by the Fund at the time of preparation, may prove to be incorrect. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Fund (including its operating subsidiaries) to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the actual results of harvests, fluctuations in the price of lentils and other crops, failure of plant, equipment or processes to operate as anticipated, accidents or labour disputes, risks relating to the integration of acquisitions or to international operations, as well as those factors referred to in the section entitled "Risk Factors" in the Annual Information Form of the Fund dated May 28, 2009 which is available on SEDAR at www.sedar.com, and which should be reviewed in conjunction with this document. Although the Fund has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
