The Quebec Workers’ Solidarity Fund is buying $50 million worth of Rogers Sugar shares to help the Montreal company increase its production capacity.
The investment is being made through a private placement at a unit price of $5.18, the equivalent of a 6% discount compared to the price of $5.51 recorded at the close of markets on Monday.
Belkorp Industries, a long-time shareholder of Rogers Sugar and also the company’s largest shareholder, is purchasing approximately $10 million worth of shares at the same price obtained by the Fonds FTQ. This is also a transaction carried out as part of a private placement.
Rogers Sugar announced last summer its intention to increase the production capacity of its Montreal refinery by approximately 20%, or 100,000 tonnes.
The total investment for this project is estimated at approximately $200 million and includes investments in sugar refining technology and equipment, as well as logistics infrastructure at the Montreal refinery and in the Greater Toronto Area. to serve the Ontario market.
The work is in progress and the main equipment has already been ordered.
The financial plan for this project already included aid from the Quebec government in the form of loans from Investissement Québec of around 65 million.
A syndicate of underwriters co-led by BMO Capital Markets and National Bank Financial is also purchasing approximately $50 million of newly issued shares at a unit price of $5.18.
In addition to Belkorp, other Rogers Sugar insiders – including executives and directors – are also purchasing shares as part of the financing transaction, details of which were presented after the markets closed on Monday.
Rogers Sugar management explains that in recent years, demand for Canadian refined sugar has steadily increased in Eastern Canada in response to increased production of sugar-containing food products destined for to the Canadian market and for export.
The company says it meets growing demand from the industrial market by transporting bulk sugar produced at its Vancouver refinery to its customers in eastern Canada.
By increasing refining capacity located closer to its customers, Roger Sugar plans to reduce its transportation costs, improve its profit margins and dedicate a greater share of its production capacity in Western Canada to new business opportunities. , including export.