REASONS TO PURCHASE SHARES IN BRR CO-OP
IF YOU ARE A FARMER:
If you plan on using the line in the future, you need to ensure the line stays.
Why should farmers care if the line stays?
- Increased competition: by having a producer owned line/ delivery point within their midst, grain companies must compete for your grain. The grain companies don't want to see this line continue to be utilized because they will have to work harder to get grain. Do you believe that grain companies will offer such large freight incentives if producers lose the option of this line?
- Class A shares should be purchased by all farmers interested in the continued operation of the line. These shares give you a voice in the operation of the co-op.
- Class A shares are the equity shares of the co-op. The value of these shares fluctuates with the assessed value of the co-operative.
- Active users of the line should consider purchasing Class B shares. These shares allow you to deliver one car per year, in perpetuity, without paying the service fee you would otherwise pay.
- At a cost of $5000/share, these shares offer a good return on investment. Consider the following: you borrow the entire cost of one class B share @ 5% (for simplicity let's assume an interest only loan). The interest costs on this loan are $250/year, but the share allows you to save the service fee, which for 2010 is set at $6.50/t x 90 t = $585/car. There are many more financial benefits to Class B share ownership. Contact your local representative to find out more.
- If your situation changes sometime in the future, Class B shares are redeemable at face value (shares not held for 5 years before redemption must get special permission from the board).
- Class C & D shares allow farmers to give additional capital support to the co-op. These shares pay a dividend of 3.5%. Farmers who do not plan on using the line, but would like to see the line stay, may want to purchase these shares as well.
The offering memorandum should be read by all interested investors.
IF YOU ARE NOT A FARMER:
Class C & D shares pay a dividend of 3.5%, compounded annually, which is a competitive return on investment. Class C & D shareholders are paid dividends before A & B shareholders are considered for patronage dividends. In the case that the co-op liquidates, class C & D shares are paid out first as well.
Class C & D shares are redeemable at face value, plus any unpaid dividends, even if these dividends haven't been declared (shares not held for 5 years before redemption must get special permission from the board).
Although the line may not have brought many side benefits to local communities in the past, we believe that if the line is locally owned, there will be a much greater opportunity for spin-off benefits to accrue to the community.
Without this line, farmers will have to haul their grain farther to large facilities. This equals more wear and tear on county roads and highways, which equals more tax dollars spent on road repairs.
If we don't purchase the line today, it will be gone tomorrow, and this opportunity will not be available in the future.
Share Offering
The shares may be of interest to individuals that are interested in using the line to move agricultural products, invest in the sustainability of transportation infrastructure in the rural, build rural community viability, or are simply interested in a competitive return on investment. Share are offered in 4 categories including A,B,C,D and E types. Class A and B shares are for members only, and require the purchaser to be an active producer of agricultural products, although not a current user of producer cars to be eligible for them. Class C and D shares are for members and non-members and carry dividends associated with them. Class D shares also carry possible voting rights. Class E shares are open to members and non-members, and do not carry dividends, but do carry possible voting rights.
We would like to acknowledge Brian P. Kaliel of Miller-Thomson LLP in Edmonton, Alberta for the amazing work that he has done putting together the offering memorandum and share offering packages. Mr. Kaliel's wealth of knowledge in the area of New Generation Co-operative incorporation and passion for saving agricultural practices has been instrumental in pushing this project forward. With his guidance and expertise, the group has been able to efficiently manage the requirements of the Alberta Securities commission and the other associated hoops through which they have needed to jump. Please visit the Miller-Thomson website to see his profile.
Class A shares
These shares will be available to members of the co-operative only, which include active producers of agricultural products, subject to approval by the Board of Directors. Each share can be purchased for $1000, and the value of these shares will be determined on an annual basis, and will fluctuate with the assessed value of the co-operative. Ownership of a Class A share will entitle a member to purchase Class B shares if they so choose.
Class B Shares
Class B shares are accompanied by a delivery rights agreement between the producer and the co-operative. Each share will be sold at a cost of $5000, the redemption value of which will not fluctuate with the assessed value of the co-op. Each share owned by a member will entitle that member to a waiver of delivery charges determined by the Board of Directors that non-members would be required to pay for the privilege of loading a producer car on the line. Once a share is purchased, it entitles the owner to the right to deliver one producer car full of product per year from any point on the line without paying a service fee until the dissolution of the co-operative or the redemption of the share.
If for some reason a producer is unable to fill all the producer cars that their share ownership entitles them to, there is an opportunity to carry-over a percentage of delivery rights to the next year, which is laid out in the offering memorandum. The Board of Directors is authorized to make changes to the rights, privileges, restrictions and conditions of Class B shares.
Class C Shares
These shares are available to both members and non-members of the co-operative, and carry no voting rights. They have a value of $1000 each and this value does not fluctuate with the assessed value of the co-operative. These shares carry the right to a dividend of 3.5% per annum. Dividends are cumulative and compounded annually if not paid. These shares can be redeemed for their face value plus all unclaimed dividends at the discretion of the Board. Class C shareholders are the second group, after Class D shareholders to be paid dividends when the co-operative has the financial capacity to do so.
Class D Shares
Class D shares are available to members and non-members as well. They are sold at $10,000 per share and carry voting rights. If more than $300,000.00 worth of these shares are issued, these shareholders have the right to appoint a member to the Board out of this group. These shares carry the right to a dividend of 3.5% per annum. Dividends are cumulative and compounded annually if not paid. These shares can be redeemed for their face value plus all unclaimed dividends at the discretion of the Board. Class D shareholders are the first group of shareholders to receive dividends on their investment when the co-operative has the financial capacity to pay dividends.
Class E Shares
Class E shares are available to members and non-members as well. They are sold at $25,000 per share and carry voting rights. If more than $300,000.00 worth of these shares are issued, these shareholders have the right to appoint a member to the Board out of this group. These shares carry no dividend rights. These shares can be redeemed for their face value at the discretion of the Board.
Please contact a member of the sales team, or a member of the Board of Directors to receive an Offering Memorandum and learn more about this opportunity. Don't delay, this is a limited time offer.