TORONTO, Sept. 6 /CNW/ - Agtech Income Fund (the "Fund") (TSX-V:AGT) is
pleased to announce that it has entered into a memorandum of understanding
(the "Memorandum") for the acquisition of the property, plant and equipment
and trade name of Harvest Grain Australia PTY based in Horsham, Victoria
Province in Australia.
The Memorandum is a non-binding expression of intent subject to the
negotiation and execution of formal agreements between the companies.
Completion of the transaction will be subject to a number of conditions,
including the receipt of all necessary regulatory, stock exchange, board of
directors, board of trustees and unitholder approvals, the completion of a
satisfactory due diligence review and customary closing conditions. The
transaction was negotiated at arm's length.
The Memorandum proposes that the Fund will acquire 100% of the assets of
a production and processing plant located in Horsham, Australia. The proposed
financial terms of the transaction cannot be disclosed until there is a
binding agreement, due to a confidentiality provision in the Memorandum. It is
expected that the acquisition will be financed by a bank loan. The transaction
is scheduled for closing by the end of September 2007.
There can be no assurance that the transaction will be completed as
proposed or at all. The Fund expects to incur significant legal, accounting,
financial advisory and regulatory costs in connection with the transaction.
The Fund will be liable for these costs even if the transaction is not
About the Fund
The Fund is a limited purpose open-ended income trust originally created
for the purpose of acquiring all of the voting securities of Agtech Processors
Inc. ("Agtech"), which transaction was completed on March 22, 2005. On
August 2, 2007, the Fund completed the acquisition of Saskcan Pulse Trading
and its subsidiaries in a transaction valued at $23.2 million. The Fund's
operating company, Alliance Pulse Processors Inc. through its operating
divisions Saskcan Pulse Trading, Agtech Processors and United Pulse Trading
Inc. is engaged in the business of sourcing, processing (splitting, cleaning,
sorting and bagging) and selling pulses and specialty crops, primarily for
export markets, with four processing plants in Saskatchewan, Canada and one
processing plant in North Dakota, USA. The units of the Fund are listed for
trading on Tier 2 of the TSX Venture Exchange under the symbol "AGT.UN".
About Harvest Grain Australia PTY
Harvest Grain Australia PTY is the owner of a fully functional processing
plant with over 7000MT of steel silo storage capacity and two cleaning and
processing lines for lentils, faba beans, broad beans and chickpeas located in
the heart of Australia's pulse producing area Horsham, Victoria Province,
approximately 300km from Melbourne.
Global Origin Diversification: Canada, USA and Australia
Following the acquisition of Saskcan Pulse, United Pulse and now the
proposed acquisition of Harvest Grain, the Fund will operate six global
processing plants with 500,000MT of annual production capacity. This is
expected to make The Fund the world's largest exporter of split and
value-added lentils, peas and pulses to the food and ingredient markets
globally. Canada is the largest exporter in the world of peas and lentils, a
staple protein food that it consumed by hundreds of millions of consumers
world-wide. Australia and the US are emerging origins for these products and
are among the five largest export origins in the world.
"This proposed acquisition continues the Fund on its path to create a
global company in our industry. The Fund would, with this acquisition, have
substantive reach into Australia, another major growing area to complement our
Canadian and USA operations," said Stephen Bodnoff, Chairman of the Board of
Trustees of the Fund. "Our clients are demanding high quality, value-added
food and ingredients from Australia. We would have the ability to react to
their needs and supply them with whole lentils, split lentils, split peas,
faba beans and chickpeas processed in our own Australian plant."
"We are excited by the opportunity that presents itself with this
transaction. As a leading world exporter of split lentils and peas, Australia
is an opportunity that we had to seize. This acquisition, if completed, would
expand our operations and continue our pursuit to become the world's most
reliable supplier of value added lentils and peas and specialty crops,"
explained Murad Al-Katib, President and CEO of Alliance Pulse Processors and a
Trustee of the Agtech Income Fund. "The Fund's group of companies export to
over 75 countries. Australia would give us another crop to market with their
crop coming in December each year. Their proximity and freight advantages to
the Indian sub-continent were key drivers that made us interested in this
"Bean Growers of Australia (BGA) as Harvest Grains largest shareholder,
are pleased with the announcement of our Memorandum with the Agtech Income
Fund. Their global reach and plans to invest in splitting and value-added
production in Victoria Province would be positive for the local farming
community. We wish them luck in their new endeavor," commented Mark Adamson,
President and CEO of BGA, based in Queensland, Australia.
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 Agtech at the time or
preparation, may prove to be incorrect.
Actual results achieved during the forecast period will vary from the
information provided herein as a result of numerous known and unknown risks
and uncertainties and other factors, many of which are beyond the control of
the Fund. There is no representation by the Fund that actual results achieved
during the forecast period will be the same in whole or in part as those
forecast. All dollar amounts in this press release are Canadian dollars unless
The TSX Venture Exchange has in no way passed upon the merits of the
proposed transaction and has neither approved nor disapproved the
contents of this press release.
For further information:
For further information: Murad Al-Katib, President and CEO, Saskcan
Pulse Trading, Telephone: (306) 525-4490, Fax: (306) 525-4463, e-mail:
firstname.lastname@example.org, Website: www.saskcan.com