Toronto, ON, April , 2014 – Ceres Global Ag Corp. (“Ceres” or the “Company”) (TSX: CRP) today announced that its 100% owned subsidiary, Riverland Ag Corp. (“Riverland”), has entered into an agreement to sell its Savage, Minnesota grain storage facility to Consolidated Grain and Barge Co. (“CGB”). Consolidated Grain and Barge Co. is a wholly owned subsidiary of CGB Enterprises, Inc., headquartered in Mandeville, Louisiana. The transaction is expected to close by the end of June, 2014 and is subject to satisfaction of certain conditions and relevant regulatory approvals.
“This sale is another milestone in our plan to transform Riverland’s operations and fund the construction of the Northgate commodity logistics centre, and it builds on the recent announcement to sell our Manitowoc, Wisconsin facility,” said Michael Detlefsen, President and CEO of Ceres. “Our focus is to optimize the capacity utilization for the remaining Riverland facilities, continue to develop our active grain trading and merchandising capabilities, and to build a high-throughput grain elevator at Northgate.”
Gross proceeds from the sale of the Savage facility will be $17.8 million. Under the terms of the sale, Ceres, through Riverland, will lease back from CGB 3.5 million bushels of storage capacity at Savage for a six-year term.
“The capacity Riverland has agreed to lease back at Savage will ensure that we retain a presence in the spring wheat and oat delivery markets, which are crucial markets in the region,” said Craig Reiners, President & CEO of Riverland Ag.
“CGB is excited about entering the Savage market and serving new customers in that area. We also plan to expand our Fertilizer, Diversified Services, and other divisions in that market as well,” said Steve Burbrink, Director of Business Development at CGB.
About Ceres Global Ag Corp.
Ceres Global Ag Corp. is a Toronto-based company focused on two primary businesses: a Grain Storage, Handling and Merchandising unit, anchored by its 100% ownership of Riverland Ag Corp., and a Commodity Logistics unit, containing its 25% interest in Stewart Southern Railway Inc. and its development of the Northgate, SK Commodity Logistics Centre. Riverland Ag Corp. is a collection of ten (10) grain storage and handling assets in Minnesota, New York, Wisconsin and Ontario having aggregate storage capacity of approximately 51 million bushels. Riverland Ag also manages two (2) facilities in Wyoming on behalf of its customer-owner. Stewart Southern Railway Inc. is a short-line railway with a range of 130 kilometres that operates in South-eastern Saskatchewan. The Northgate Commodity Logistics Centre is a proposed $90 million grain, oil and oilfield supplies trans-loading site being developed in conjunction with Riverland Ag and several potential energy company partners, connected to the Burlington Northern Santa Fe Railroad and expected to open later in 2014. Ceres common shares trade on the Toronto Stock Exchange under the symbol "CRP".
CGB, with over 90 grain elevators across the Midwest, oversees a diverse family of businesses providing an array of services for producers. The company’s entrepreneurial approach has thrived over 40 years and also includes transportation, processing, bulk handling, financing, crop insurance, and logistics services for a global base of customers. Visit www.cgb.com to learn more.
Cautionary Notice: This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation and United States securities laws about the sale of the Savage facilities. Forward-looking information in this news release are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from current expectations. There can be no assurance that this transaction will be completed, or the timing of any closing. Some of the factors that could affect the closing of the transactions include the need to obtain regulatory approval and satisfaction of other closing conditions. Ceres undertakes no obligation to update forward-looking information if circumstances or management's expectations should change, except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking information.
For more information please contact:
President & CEO
Ceres Global Ag Corp.
VP Grain Division
CGB Enterprises, Inc.