CHS Inc. announces issuance of shares of preferred stock to redeem $77 million of patrons' equity

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Apr 01, 2016, 11:51 ET

ST. PAUL, Minn., April 1, 2016 /PRNewswire/ -- CHS Inc. (NASDAQ: CHSCP, CHSCO, CHSCN, CHSCM, CHSCL) today announced the issuance, on March 31, 2016, of 2,693,195 shares of its Class B Cumulative Redeemable Preferred Stock, Series 1 (the "Class B Series 1 Preferred Stock") to redeem about $77 million of qualified CHS equity.

The amount of CHS qualified equity redeemed with each share of Class B Series 1 Preferred Stock was $28.50, equal to the closing price for one share of the Class B Series 1 Preferred Stock on March 23, 2016. The shares of Class B Series 1 Preferred Stock were issued to 1,170 eligible member cooperatives and associations.

The Class B Series 1 Preferred Stock trades on the NASDAQ Global Select Market under the symbol CHSCO and has an annual dividend rate of 7.875 percent if, when and as declared by the CHS Board of Directors.

"This distribution allows CHS to deliver direct economic value to our owners by redeeming eligible qualified equity with shares of CHS preferred stock," said David Bielenberg, chairman, CHS Board of Directors.

Bielenberg said the special equity redemption with preferred stock is in keeping with the board's goals of providing an appropriate economic return to the cooperative's owners while maintaining a strong balance sheet and taking a long-term view in operating its businesses on behalf of CHS owners.

To be eligible for the redemption, member cooperatives and associations must have been "active patrons" who held qualified capital equity certificates in an amount equal to or greater than $500. "Active patrons" are non-individual patrons who have done business with CHS in the past five fiscal years.

A registration statement relating to the issued shares of Class B Series 1 Preferred Stock has been filed with the Securities and Exchange Commission and became effective on March 31, 2016. The specific terms of the issuance of the shares of Class B Series 1 Preferred Stock are described in a prospectus filed with the Securities and Exchange Commission in connection with the issuance. The offering of shares of Class B Series 1 Preferred Stock was made only by means of a written prospectus that forms a part of the registration statement, copies of which may be obtained at the Securities and Exchange Commission's website at http://www.sec.gov or from CHS, Attention: Theresa Egan, Vice President, Accounting and Corporate Controller, 5500 Cenex Drive, Inver Grove Heights, Minnesota 55077 or via telephone at (651) 355-6000.

This document contains, CHS publicly available documents may contain, and CHS officers, directors and other representatives may from time to time make, "forward–looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward–looking statements can be identified by words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Forward–looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on CHS's current beliefs, expectations and assumptions regarding the future of its businesses, financial condition and results of operations, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward–looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the control of CHS. CHS's actual results and financial condition may differ materially from those indicated in the forward–looking statements. Therefore, you should not place undue reliance on any of these forward–looking statements. Important factors that could cause CHS's actual results and financial condition to differ materially from those indicated in the forward–looking statements are discussed or identified in CHS's public filings made with the U.S. Securities and Exchange Commission, including in the "Risk Factors" discussion in Item 1A of the CHS Annual Report on Form 10–K for the fiscal year ended August 31, 2015.Any forward–looking statements made by CHS or its representatives in this document are based only on information currently available to CHS and speak only as of the date on which the statement is made. CHS undertakes no obligation to publicly update any forward–looking statement, whether written or oral that may be made from time to time, whether as a result of new information, future developments or otherwise, except as required by applicable law.

SOURCE CHS Inc.