Farmers Edge, a global provider of digital agriculture, entered into a C$75 million ($60 million) secured credit facility with Fairfax Financial Holdings and its affiliates pursuant to the terms of a binding term sheet. The facility will bear interest at a rate of 6% per annum and will mature on Jan. 31, 2025. Farmers Edge will pay an annual commitment fee of 1% of the total undrawn amount, with C$750,000 ($600,862) payable upon closing of the transaction and the next payment being due one year thereafter. The net proceeds of the facility will be used for working capital and general corporate purposes of Farmers Edge. The facility will be guaranteed by the company’s subsidiaries and secured by all of the present and after-acquired personal property of the company and its subsidiaries.
The transaction, which constitutes a “related party transaction” as defined in Multilateral Instrument 61- 101 – Protection of Minority Security Holders in Special Transactions (MI 61-101), was unanimously approved by the board of directors of Farmers Edge, with the directors affiliated with Fairfax abstaining from the vote and the deliberations as to whether to proceed with the transaction. The transaction will be exempt from the minority approval requirement of MI 61-101, and the valuation requirements of MI 61-101 will not be applicable. Closing of the transaction is subject to the finalization of definitive documentation and customary conditions, including, on account of the transaction involving Fairfax, which is a related party of Farmers Edge, the receipt of the acceptance of the Toronto Stock Exchange (TSX) under section 501(c) of the TSX company manual. The transaction will close as soon as all conditions precedent have been satisfied.
