WINNIPEG, Nov. 3, 2014 /CNW/ - Legumex Walker Inc. (TSX: LWP) ("the Company") announced today that it has closed its previously announced CAD$16.5 million five-year convertible debenture ("the Debenture") issued to The Scoular Company ("Scoular"). The Debenture has an interest rate of 7.75% per annum, payable semi-annually beginning December 31, 2014 and having a maturity date of December 31, 2019. The Debenture is convertible at Scoular's option into Legumex Walker common shares at CAD$6.75 per share. Under the terms of the Debenture, Scoular has the right upon conversion of the debenture to nominate one director to Legumex Walker's board for as long as it continues to hold 10% or more of the Company's outstanding common shares.
Proceeds from the issuance of the Debenture will be used for growth opportunities related to the natural evolution at the Company's Special Crops business to offering higher margin healthy specialty food ingredients to its established base of quality-conscious customers, working capital at the Company's Pacific Coast Canola ("PCC") subsidiary to accelerate its growth strategy focused on high margin specialty products, as well as general corporate purposes.
The Debenture was issued as part of Legumex Walker's recently announced long-term strategic alliance with Scoular. Under the alliance, in addition to Scoular's investment in Legumex Walker, PCC and Scoular also have entered into a long-term agreement in which Scoular will procure all canola seed for processing at the PCC plant and will market all of the canola meal and canola oil produced by PCC. In conjunction with this agreement, PCC and CHS Inc. have mutually agreed to end their existing canola feedstock procurement, meal, and oil sales and position management agreement.
About Legumex Walker Inc.
Legumex Walker is a growth-oriented processor and merchandiser of special crops (sunflower seeds, flax and canary seed), pulses (lentils, peas, beans and chickpeas) and canola products. The Company is one of the largest processors of special crops and pulses in Canada. Legumex Walker has 15 processing facilities strategically located in key growing regions in the Canadian Prairie Provinces, the American Midwest and China; a global sales, logistics and distribution platform; and access to multimodal transportation capabilities. In addition, the Company has an 84 percent interest in Pacific Coast Canola, LLC, which operates the largest commercial-scale canola oilseed processing facility west of the Rocky Mountains.
Cautionary Note on Forward-looking Statements
This press release contains "forward-looking information" within the meaning of Canadian securities laws, which may include, but is not limited to, statements relating to the acceleration of the Company's growth strategy. Such forward-looking information reflects the Company's views with respect to future events and is subject to risks, uncertainties and assumptions. The Company's growth strategy focused on high margin specialty products is subject to the business risks relating to the canola harvest, the PCC Plant and marketing of its products, including possible lack of demand for canola meal produced from the PCC Plant, possible problems related to the operation of the PCC Plant, availability of feedstock, the demand for and availability of rail, port and other transportation services, the risk that farmers will not plant higher value specialty seed, as well as those factors referred to in the section entitled "Risk Factors" in the Company's Management's Discussion and Analysis for the period ended December 31, 2013, the period ended June 30, 2014 and the Company's 2014 Annual Information Form, which are available on SEDAR at www.sedar.com. These statements assume that markets for higher margin products will become available to PCC. Although the Company 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. Although the Company believes the assumptions inherent in forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this press release. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.
SOURCE: Legumex Walker Inc.
For further information: Investor and Financial Media Relations: Lawrence Chamberlain, TMX Equicom, [email protected], (416) 815-0700 ext. 257