SWP Board Approves Recapitalization Plan

REGINA - Feb 7/05 - SNS -- The Saskatchewan Wheat Pool's (SWP) board of directors approved a plan to recapitalize its shares, Convertible Subordinated Notes and make a subsequent rights offering to all common Shareholders.

The principal elements of the proposal include:

* the continuance of the Pool as a business corporation under the Canada Business Corporations Act involving the consolidation of the Class "A" Voting Shares and the Class "B" Non-Voting Shares of the Company into new common shares;

* the early conversion of approximately $173 million of the Pool's Convertible Subordinated Notes into new common shares;

* a $150 million rights offering to be made available to all of the Pool's common Shareholders following the continuance and exchange of the Convertible Notes; and

* the establishment of a Farm Leadership Co-operative whose mandate will include nominating a minimum of four directors to sit on the Pool's Board.

The Pool will be seeking approvals for the recapitalization from its Delegates, Class "B" Non-Voting Shareholders and Convertible Noteholders. The Pool has received lock-up agreements from Noteholders representing approximately 37.7% of the Convertible Subordinated Notes currently outstanding, in which they commit to vote in favor of the recapitalization.

Under the proposed continuance, the existing Class "A" Voting Shares and Class "B" Non-Voting Shares of the Pool will be consolidated into a single class of common voting shares.

Class "A" Shareholders will be entitled to 3.62 new common shares, which equates to the $25 par value of each Class "A" Share, or, if they so choose, $25 in cash; and Class "B" Shareholders will each receive one new common share for every 20 Class "B" Non-Voting Shares they hold.

Fractional shares resulting from the exchange and consolidation will be aggregated and sold on behalf of the holders on the Toronto Stock Exchange. Cheques representing the value of fractional share interests of Shareholders will subsequently be issued.

The Convertible Notes will be exchanged for approximately 131.6 common shares per $1,000 of principal amount, in full satisfaction of their notes. This would be equivalent to approximately 2,632 common shares, or $0.38 per Class "B" share prior to the one for 20 consolidation which occurs upon continuance. Noteholders currently have the right to convert their $1,000 of principal amount into 2,227 Class "B" Non-Voting Shares.

Following continuance and the exchange of Convertible Notes, the Pool intends to proceed with a rights offering of approximately $150 million to the holders of its common shares. The rights offering will provide each common Shareholder the right to purchase, at a discount, additional common shares in the Pool. The subscription price will be fixed shortly after completion of the continuance and exchange of the Convertible Notes. It is the Pool's intention to use $100 million of the proceeds to eliminate debt with the balance to be used for general corporate purposes.

A syndicate of Canadian investment dealers led by BMO Nesbitt Burns Inc. has entered into a standby purchase agreement with the Pool whereby the underwriters have agreed to purchase, at the subscription price determined following the continuance and Note exchange, any common shares that are not otherwise purchased through the rights offering. This commitment is subject to certain conditions, including a material adverse change in the business, operations or prospect of the Pool.