Regina, SK — AGT Food and Ingredients Inc. has announced that through a wholly-owned subsidiary, AGT Terminal East Inc.(AGTTE), AGT has acquired a minority interest in CanEst Transit Inc., a terminal in the Port of Montreal, which, among other things, stores and fills containers and handles and transports bulk products. The shareholder group in CanEst includes La Coop fédérée and Transit BD Inc.
AGTTE’s minority equity interest may be increased pursuant to an earn-up, based on delivered volumes under the terminal agreement (defined below). AGTTE has also provided a shareholder loan to CanEst, which, together with other shareholder loans from the other shareholders, is to be used for working capital for the Terminal. AGTTE has also secured a 16 year terminal agreement with CanEst, which expires on August 31, 2033, with an option to extend on the agreement by both parties for an additional five years. The aggregate consideration for AGTTE’s equity interest and portion of the shareholder loan is $1,925,000 and AGTTE’s best efforts to deliver consistent volumes of unit trains of agri-product to the Terminal for containerization for export during the term of the Terminal Agreement.
“Port facility access at tide water is an essential strategy for AGT to execute the growth of our Canadian bulk handling business. 60,000 metric tonnes of storage and a strategic location within the Port of Montreal made this opportunity one that we felt was a good fit with our recent investments in bulk rail logistics assets. Port assets in Montreal are an important requirement for receiving 100 unit rail car trains to transload into containers. This facility is unique in its ability to do that in Montreal. It fit with our growth strategy,” said Murad Al-Katib, President and CEO of AGT Foods.
“Investments in terminals, as well as long term service agreements at port locations, are key components for our Canadian business strategy. We already have the Great Lakes terminal in Thunder Bay with Mobil Ex, and now add a stake in CanEst. We are pleased to be partnering with Transit BD as the majority shareholder, bringing in the experience of the Beaudoin Family and management at CanEst and La Coop fédérée as strong partners with this modern port infrastructure. This is a strategic investment for our further growth,” added Huseyin Arslan, Executive Chairman of AGT Foods.