Urbana Corporation's Strategic Move to Enhance Shareholder Value

Urbana Corporation Facilitates Key Transition for IGPC

Urbana Corporation (TSX: URB, URB.A) has made a significant stride in the grain processing sector following a decisive vote that took place during a special general meeting. The meeting revealed overwhelming support from both Members and Preference Shareholders of Integrated Grain Processors Co-operative Inc. (IGPC) for an essential transformation of the company.

Approval for Significant Changes

During this important gathering, shareholders overwhelmingly agreed to convert IGPC from a co-operative corporation into a business corporation. This strategic move will facilitate the sale of all IGPC shares via a planned statutory arrangement to Alco Energy SA, with its operations in Canada spearheaded by its subsidiary, Alco Energy Canada Corp. This change represents a pivotal point for IGPC, empowering the company to pursue broader opportunities in the competitive ethanol market.

Understanding the Impact of the Arrangement

Urbana currently owns a substantial stake in IGPC, holding 2,052,066 Class E preferred shares, constituting 18.7% of IGPC's equity. This investment demonstrates Urbana's commitment to the biofuels sector, particularly in a time when renewable energy solutions are paramount. As the transaction approaches completion, subject to regulatory approvals, Urbana's shareholders eagerly anticipate the potential benefits associated with the sale.

Financial Prospects for Urbana

The original investment of Urbana in IGPC was approximately $7.5 million, and to date, the company has garnered around $11.9 million in dividends and capital distributions from this investment. The forthcoming arrangement is poised to yield substantial financial returns, with an expected distribution of approximately $64.8 million to Urbana. Notably, a portion of this amount has already been accrued, which suggests a favorable outlook for the company’s future.

What This Means for Shareholders

The implications of this arrangement are significant. Urbana's Net Assets per share, after-tax, are projected to rise by approximately $0.16 due to this transaction. A rise in net assets is a positive signal for shareholders, indicating the company’s robust financial management and strategic positioning within the market. The expected closing of this arrangement is slated for December, and it is anticipated that shareholders will soon see tangible benefits from this transformative effort.

Leadership and Vision

Thomas S. Caldwell, C.M., on behalf of Urbana’s Board of Directors, expressed optimism regarding the future of the Integrated Grain Processors Co-operative. This move not only consolidates Urbana’s stake within the energy sector but also enhances its capacity to deliver robust returns in an evolving market landscape.

Contact Information

For further inquiries regarding this significant transition, Elizabeth Naumovski of Investor Relations can be reached via email at enaumovski@urbanacorp.com or by phone at 416-595-9106.

Frequently Asked Questions

What is the recent change approved by Urbana Corporation?

The approved change allows IGPC to convert from a co-operative to a business corporation, facilitating the sale of its shares.

How much of IGPC does Urbana Corporation own?

Urbana Corporation holds approximately 18.7% equity in IGPC, with 2,052,066 Class E preferred shares.

What are the expected financial returns from the sale?

The sale is expected to provide Urbana with approximately $64.8 million in proceeds, alongside an increase in net assets per share.

When is the closing of the arrangement expected?

The closing of the arrangement is projected to occur in December.

Who should be contacted for more information about this transition?

Elizabeth Naumovski in Investor Relations is the point of contact for inquiries regarding this transaction.

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