Media Centre
2004/12/07

Maple Leaf Foods Announces $165 Million Common Share Issue and Convertible Debenture Redemption

Toronto, Ontario - December 6, 2004 – Not for distribution to United States newswire services or for dissemination in the United States.

Maple Leaf Foods Inc. (TSX: MFI) today announced that it has reached an agreement to sell $165 million of common stock on an underwritten basis. The shares will be issued at a price of $14.55 per share for estimated net proceeds, after costs, of approximately $158 million. The Company expects the offering to close by December 20, 2004, subject to regulatory approval.

“This share issue successfully completes the long-term financing of the Schneider Foods acquisition and considerably strengthens the Company's balance sheet,” said Mr. Michael Vels, Chief Financial Officer of Maple Leaf Foods. “In combination with the recently announced $500 million private debt issue, we will have established a low cost capital structure that provides a solid financial platform for future growth.”

The Company will use $91.3 million of the proceeds to redeem its outstanding convertible debentures for cash at par. McCain Capital Corporation holds $50 million of the convertible debentures. Notice of the redemption will be issued to the convertible debenture holders immediately, with an estimated redemption date of January 6, 2005. Historically, the convertible debentures have been accounted for as equity on the Company's balance sheet. Changes in accounting principles would require these debentures to be classified as debt commencing in 2005. The redemption of these convertible debentures will allow the Company to preserve the equity treatment of the amount of the debentures, and avoid the payment of interest for 2005. The balance of the net proceeds from the equity offering will be used to pay down debt.

McCain Capital Corporation has committed to purchase $75 million of the offering and after redemption of the debentures, McCain Capital Corporation will own approximately 33% of the Company's shares. Ontario Teachers Pension Plan Board, which currently owns 38% of Maple Leaf Foods, will not participate in the issue, enabling a broadening of the Company's investor base and an increase in the Company's share float.

Maple Leaf Foods Inc. is a leading Canadian food processing company committed to delivering quality food products to consumers around the world. Headquartered in Toronto, Canada, the Company employs approximately 23,000 people at its operations across Canada, and in the United States, Europe and Asia. The Company reported sales of $5.0 billion in 2003.


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