Village Farms International Announces $13.5 Million Bought Deal Public Offering
NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Vancouver, BC, December 4, 2017 – Village Farms International, Inc. (“Village Farms” or the “Company”) (TSX: VFF) (OTCQX: VFFIF) is pleased to announce that it has entered into an agreement with Beacon Securities Limited (“Beacon”), as lead underwriter, on its own behalf and on behalf of a syndicate of underwriters (together with Beacon, the “Underwriters”), pursuant to which the Underwriters have agreed to purchase, on a bought deal basis, 2,500,000 common shares (the “Offered Shares”) in the capital of the Company at a price of $5.40 per Offered Share (the “Issue Price”) for aggregate gross proceeds to the Company of $13,500,000 (the “Offering”). (All figures are in Canadian dollars unless otherwise stated.)
The closing of the Offering is expected to occur on or about December 21, 2017 and is subject to the completion of formal documentation and receipt of regulatory approval, including the approval of the Toronto Stock Exchange. The net proceeds of the Offering will be used to repay a portion of its term loan with a Canadian Creditor, which will permit the Company to remove its 1.1 million square foot Delta 2 greenhouse facility as collateral against such term loan, and for general corporate and working capital purposes. It is a requirement of the Company’s joint venture (“Pure Sunfarms”) agreement for the production of cannabis that, should the option on the Delta 2 greenhouse be exercised by the JV, the Delta 2 greenhouse be contributed to Pure Sunfarms on an unencumbered basis.
“This is a very positive step forward for our Company,” said Michael DeGiglio, Chief Executive Officer, Village Farms International, Inc. “Our joint venture for large scale, low cost, high quality cannabis production, Pure Sunfarms, is progressing on track towards commencing commercial production at the initial 1.1 million square foot Delta 3 greenhouse in the Spring of 2018. This financing will position our second 1.1 million square foot greenhouse, Delta 2, for immediate contribution to Pure Sunfarms, should it exercise its option on the facility.”
The Offered Shares to be issued under the Offering will be offered by way of a short form prospectus to be filed in each of the Provinces of Canada (other than Quebec) and may be offered in the United States to Qualified Institutional Buyers pursuant to exemptions from the registration requirements under rule 144A of the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), in a manner that does not require the Offered Shares to be registered in the United States. The Offered Shares may be also sold in such other jurisdictions as the Company and Beacon may agree. This press release does not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor in any other jurisdiction.
About Village Farms’ Joint Venture for Cannabis Production
In June 2017, Village Farms formed a joint venture, Pure Sunfarms Corp. (50% owned by each of Village Farms and its partner) for large-scale, low-cost, high quality cannabis production. Under the terms of the joint venture agreement, Village Farms initially contributed a 1.1 million square foot (25-acre) greenhouse facility in Delta, BC, (the “Delta 3 greenhouse”) which will be converted to ACMPR (Access to Cannabis for Medical Purposes Regulations) compliant production and, if permitted by applicable law, production for the nontherapeutic adult-use market. Village Farms’ partner is contributing an aggregate of $20 million in cash to fund the conversion of the Delta 3 greenhouse.
On September 14, 2017, the application for a “second site” cultivation license under the ACMPR for the Delta 3 greenhouse was submitted to Health Canada and the application was subsequently accepted for review by Health Canada on September 18, 2017. Subsequent to acceptance of the application, Pure Sunfarms commenced physical conversion of the 1.1 million square foot greenhouse facility in Delta, British Columbia and expects to complete conversion of the first 250,000 square foot quadrant in February 2018 such that, subject to the receipt of cultivation and sales licenses from Health Canada, it expects to begin selling dried cannabis on or before July 2018 and to have all four quadrants commercially producing in the fourth quarter of 2019. Pure Sunfarms conservatively forecasts annual production from the initial 1.1 million square foot greenhouse in Delta to be a minimum of 75,000 kg of dried cannabis, which it expects to achieve in 2020, and a cost of production (including depreciation) at full production of less than $1.00 per gram.
About Village Farms International, Inc.
Village Farms International, Inc. is one of the largest and longest-operating vertically integrated greenhouse growers in North America and the only publicly traded greenhouse produce company in Canada. With more than 750 years of accumulated master grower experience coupled with advanced proprietary technology and environmentally sustainable growing practices, Village Farms is highly resource efficient. Village Farms produces and distributes fresh, premium-quality produce with consistency 365-days a year to national grocers in the U.S. and Canada from its large-scale Controlled Environment Agriculture (CEA) greenhouses in British Columbia and Texas, as well as from its partner greenhouses in BC, Ontario and Mexico.
Stephen C. Ruffini Executive Vice President and Chief Financial Officer Village Farms International, Inc. (407) 936-1190, ext. 340
Lawrence Chamberlain Investor Relations (416) 519-4196 firstname.lastname@example.org