[SAVIA LOGO]
Contacto:
Hictor Sepzlveda
Telifono: 8363-7812
e-mail: hsepulveda@savia.com.mx
BIONOVA HOLDING CORPORATION, SAVIA'S MAIN
SUBSIDIARY, ANNOUNCED TODAY A FINANCIAL
RESTRUCTURING AND A GOING PRIVATE TRANSACTION.
Monterrey N.L., Mexico, February 4, 2004. Savia, S.A. de C.V. ( BMV: "Savia")
entered into an Agreement in Principle with Bionova Holding Corporation
("Bionova") dated as of February 2, 2004, pursuant to which Bionova will
restructure certain of its indebtedness with Savia and will cease to be a
public company. Savia, its wholly-owned subsidiary, Ag-Biotech Capital, LLC,
and Bionova are filing today a Transaction Statement on Schedule 13E-3 with
the Securities and Exchange Commission ("SEC").
The debt restructuring, involves $79.8 million of indebtedness of Bionova to
Savia, which became due and payable on December 31, 2003. A portion of this
indebtedness will be capitalized in exchange for 26,959,097 shares of Bionova
common stock. As a result, Savia will beneficially own 90.1% of the
outstanding shares of Bionova common stock. A newly-formed subsidiary of
Savia, which will be capitalized with all of the shares of Bionova common and
preferred stock then held by Savia and its affiliates, will effect a "short
form" merger with Bionova. Following the effectiveness of the merger, Bionova
will become a privately-held company. In the merger, the public stockholders
of Bionova will receive $0.09 per share in cash for each share of Bionova
common stock that they hold.
The completion of the transactions described above are subject to the approval
of Savia's Board of Directors and the satisfaction of certain closing
conditions, which are described in the attached Bionova press release.
Savia (www.savia.com.mx) participates in industries that offer high
growth potential in Mexico and internationally. Its principal subsidiaries
include Bionova, a company focused on the production, distribution and
commercialization of fruits and vegetables and Desarrollo Inmobiliario Omega, a
company dedicated to the development of real estate in Northern Mexico.
[BIONOVA HOLDING CORPORATION LOGO]
For Further Information:
Bionova Holding Corporation
(609)-744-8105
BIONOVA HOLDING ANNOUNCES FINANCIAL RESTRUCTURING
COMPANY TO BE TAKEN PRIVATE
Nogales, Arizona--February 4, 2004--Bionova Holding Corporation (Pink Sheets:
BVAH) announced today that it entered into an "Agreement in Principle" with
Savia, S.A. de C.V. dated as of February 2, 2004 that provides for a financial
restructuring of the company. In conjunction with this financial restructuring
Bionova Holding will become a private company through a merger in which public
stockholders will be paid $0.09 per share for each share they hold of the
Company's common stock.
Bionova Holding's management stated there were two principal reasons for
undertaking the restructuring at this time. First, Bionova Holding's debt with
Savia, which amounted to $79.8 million, became due and payable to Savia on
December 31, 2003. As a consequence, the Company currently is in default on this
debt obligation, as well as certain other debt obligations. Second, as the
Company has continued to sustain operating losses and its cash position has
continued to deteriorate, it will not be able to afford the high, and
ever-increasing costs of remaining a public company.
The financial restructuring of the Company generally involves four
transactions, as follows. First, the Company will issue 26,959,097 shares of the
Company's common stock to its parent company, Savia, in satisfaction of part of
the principal amount of the debt the Company owes to Savia (the "Exchange").
Second, Savia will then consolidate these new shares with the indirect equity
interest held in the Company by its wholly-owned subsidiary, Ag-Biotech Capital
LLC (18,076,839 shares) in a new subsidiary, Newco. Newco's holding of
45,035,936 shares will then represent 90.1% of all authorized shares of the
Company. Third, Savia will forgive the balance of the $79.8 million of its debt
with Bionova Holding (the "Debt Forgiveness"). And finally, immediately after
the Debt Forgiveness, Newco will effect a short-form merger with the Company
(the "Merger"). In the Merger public stockholders will be paid $0.09 per share
for each share of the Company's common stock they hold. Though the Company's
cash resources are severely limited and the Company is not able to repay its
debt to Savia, Savia has agreed in principle to these transactions and to the
cash payment to the stockholders in the Merger. The Company's unaffiliated
stockholders will not have any right to vote on the Merger, but will have the
right to dissent from the Merger and exercise their statutory right to appraisal
in accordance with Delaware law.
Bionova Holding's Board of Directors unanimously approved the Exchange and
determined not to oppose the Merger. The Board engaged the services of
AgriCapital Securities Inc. ("AgriCapital"), an investment banker with
significant experience in the agriculture business, to act as a financial
advisor to the Board to advise and assist the Board as the Board considered the
desirability of, and developed a general strategy for, effecting the Exchange,
the Debt Forgiveness and the Merger taking into consideration the best
interests of the unaffiliated minority stockholders of the Company. AgriCapital
rendered an opinion to the Board that (i) the $0.09 per share Merger
consideration to be paid to the Company's stockholders (other than Savia and
its affiliates), is fair, from a financial point of view, to such stockholders
and (ii) the issuance of shares of the Company's common stock in connection
with the Exchange is fair, from a financial point of view, to the Company.
Savia and the Company are filing today a Transaction Statement on Schedule
13E-3 with the Securities and Exchange Commission and hope to complete the
transactions prior to the end of the first quarter of 2004. However, due to
potential delays associated with complying with applicable legal
requirements, and because the closing is subject to conditions to closing, the
exact date of the closing, or whether the transactions will close at all, cannot
be predicted with certainty. The conditions to the closing of the transactions
include the approval by the Board of Directors of Savia of the Exchange, the
Debt Forgiveness and the Merger; the passing of 20 days from the date of the
mailing of the Schedule 13E-3 Statement to shareholders of the Company; the
negotiation and execution of a definitive Exchange Agreement mutually acceptable
to the Company and Savia; the absence of any law or order or other event which
would prevent the Exchange, the Debt Forgiveness or the Merger; there not having
occurred any event that, in Savia's good faith judgment, resulted in an actual
or threatened material adverse change in the business or condition of the
Company since the date of the Agreement in Principle; the absence of any
threatened or pending litigation or other legal action relating to the Exchange,
the Debt Forgiveness or the Merger; AgriCapital's fairness opinion not being
withdrawn prior to the consummation of the Exchange, the Debt Forgiveness and
the Merger; not more than 10% of the unaffiliated stockholders elect to exercise
their statutory dissenters' rights in connection with and prior to the
effectiveness of, the Merger; and neither the Company nor Savia incurring
significant expenses associated with the Exchange, the Debt Forgiveness or the
Merger, other than approximately $650,000 of professional fees and other
expenses that the Company contemplates will be incurred by the filing parties in
connection with the preparation and dissemination of the Schedule 13E-3
Statement and the closing of the Exchange, the Debt Forgiveness and the Merger
in an efficient and prompt manner.
Upon the closing of the transactions, Bionova Holding will become a
privately-held company. Accordingly, upon closing, the registration of the
Company's stock under the Securities Exchange Act of 1934 will terminate,
Bionova Holding's reporting obligations under that Act will terminate, and
there will no longer be a public market for Bionova Holding's shares.
Bionova Holding Corporation is a leading fresh produce grower and
distributor. Its premium Master's Touch(R) and FreshWorld Farms(R) brands are
widely distributed in the NAFTA market. Bionova Holding Corporation is majority
owned by Mexico's SAVIA, S.A. de C.V.
All statements in this press release other than statements of historical facts
are "forward-looking" statements, including without limitation statements
regarding the Company's financial position, business strategy, plans and
objectives of management, and industry conditions. Although the Company
believes that the expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove to be
correct. The following factors, among others, may affect the Company's actual
results and could cause such results to differ materially from those expressed
in any forward-looking statements made by or on behalf of the Company:
liability resulting from shareholder lawsuits, commericial success of new
products, agribusiness risks, inability to obtain additional financing,
competitive factors, governmental and economic risks associated with foreign
operations, and proprietary protection of and advances in technology. Further
information on the factors that could affect the Company's financial results is
contained in the Company's Form 10-Q for the quarter ended September 30, 2003
and Form 10-K for the year ended December 31, 2002 which have been filed with
the Securities and Exchange Commission.