Ag Growth International Inc T.AFN

Alternate Symbol(s): T.AFN.DB.J | T.AFN.DB.F | AGGZF | T.AFN.DB.G | T.AFN.DB.H | T.AFN.DB.I

Industrials

Ag Growth International Inc. is a provider of the equipment and solutions required to support the storage, transport, and processing of food globally. The Company provides equipment solutions for agriculture bulk commodities, including seed, fertilizer, grain, rice, feed, and food processing systems. It has manufacturing facilities in Canada, the United States, Brazil, Italy, France, and India and distributes its products globally. Its segments include Farm and commercial. Its Farm segment focuses on the needs of on-farm customers, and its product offerings include grain, seed, and fertilizer handling equipment; aeration products; grain and fuel storage solutions, and grain management technologies. Its Commercial segment focuses on commercial entities, such as port facility operators, food processors and elevators. Its product offerings include larger diameter grain storage bins and high-capacity grain handling equipment; food and feed handling storage and processing equipment.

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Ag Growth International Inc

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Post by retiredcfon Jul 28, 2023 10:34am

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Post# 35561452

RBC

July 28, 2023

AGI (Ag Growth International)
Settles claim related to September 2020 bin failure

TSX: AFN | CAD 56.00 | Outperform | Price Target CAD 70.00

Sentiment: Neutral

Our view: We are pleased to see a resolution of the primary litigation stemming from the grain bin failure in 2020, which removes most of the overhang related to the incident, although we expect a neutral reaction from AGI shares as the final financial impact is relatively moderate and the incident has already been well-understood by investors.

Summary: Ag Growth announced the company has agreed to pay $15.6M as part of the lawsuit settlement from a commercial grain bin failure in September 2020. At that time, one of the grain bins at Fibreco Export's North Vancouver McKeen Avenue terminal collapsed upon being fully loaded. As a result, AGI replaced the hopper base at all of the bins, including the collapsed bin, at the McKeen Avenue terminal, in addition to 20 other bins that were manufactured and supplied to another customer, but not yet commissioned, totaling 35 bins for a sales value of $19M. However, Fibreco initiated a lawsuit in June 2021, which cited AGI and the engineer responsible for the inadequate design which led to the silo's failure and up to $80M in losses for the export terminal operator.

The AGT claim remains outstanding, but Ag Growth continues to hold the position that the claim is without merit. AGT is a customer of Fibreco, but had no contractual relationship with Ag Growth.

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