Agrium Inc.

Order

Headnote

National Policy 11-206 Process for Cease to be a Reporting Issuer Applications – Application for an order that the issuer is not a reporting issuer under applicable securities laws – Issuer is a wholly-owned subsidiary of a reporting issuer subsequent to a plan of arrangement – More than 15 security holders in any jurisdiction of Canada and more than 50 security holders worldwide – Order granted.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).

Citation: Re Agrium Inc., 2018 ABASC 72

May 14, 2018

IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ALBERTA, ONTARIO AND SASKATCHEWAN
(the Jurisdictions)

AND

IN THE MATTER OF
THE PROCESS FOR CEASE TO BE
A REPORTING ISSUER APPLICATIONS

AND

IN THE MATTER OF
AGRIUM INC.
(the Filer)

ORDER

Background

The securities regulatory authority or regulator in Alberta and Ontario (each a Dual Exemptive Relief Decision Maker) has received an application from the Filer for an order under the applicable securities legislation of those jurisdictions that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Reporting Issuer Relief).

The securities regulatory authority or regulator in Alberta and Saskatchewan (each a Coordinated Exemptive Relief Decision Maker) has received an application from the Filer for an order under the applicable securities legislation of those jurisdictions that it is exempt from being designated a reporting issuer under section 3 of Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets (MI 51-105) (the OTC Relief).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a hybrid application):

  1. the Alberta Securities Commission is the principal regulator for this application;
  2. the Filer has provided notice that sub-section 4C.5(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador in respect of the Reporting Issuer Relief;
  3. this order is the order of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario in respect of the Reporting Issuer Relief; and
  4. the decision evidences the decision of the securities regulatory authority or regulator in Saskatchewan in respect of the OTC Relief.

Interpretation

Terms defined in National Instrument 14-101 Definitions or MI 11-102 have the same meaning if used in this order, unless otherwise defined.

Representations

This order is based on the following facts represented by the Filer:

  1. The Filer is a corporation governed by the Canada Business Corporations Act (the CBCA). The Filer's head office is located in Calgary, Alberta.
  2. The Filer is a reporting issuer in each province of Canada and is not in default of securities legislation in any jurisdiction of Canada.
  3. Effective January 1, 2018, the Filer and Potash Corporation of Saskatchewan Inc. (PotashCorp) completed a merger of equals pursuant to a plan of arrangement (the Arrangement) under Section 192 of the CBCA. Pursuant to the Arrangement, all of the issued and outstanding common shares of each of the Filer (the Agrium Shares) and PotashCorp were acquired, directly or indirectly, by Nutrien Ltd. (Nutrien). As a result, the Filer is a wholly-owned subsidiary of Nutrien.
  4. Following completion of the Arrangement, the Agrium Shares were delisted from the Toronto Stock Exchange (the TSX) and the New York Stock Exchange (the NYSE) and the Filer ceased to have any statutory reporting obligations in the United States with the SEC, other than certain post-closing filings in respect of the financial year ended December 31, 2017 which have since been made by the Filer.
  5. In connection with the Arrangement, each equity incentive award of the Filer was assumed or replaced by Nutrien based upon the applicable exchange ratio under the Arrangement. Nutrien also assumed the obligations in respect of awards under the Filer’s non-equity based incentive compensation plans. As a result, there are no incentive awards that are convertible or exchangeable into, or based on the price of, securities of the Filer.
  6. The authorized capital of the Filer consists of an unlimited number of Agrium Shares and an unlimited number of preferred shares. Nutrien is the sole beneficial holder of all of the issued and outstanding Agrium Shares and no preferred shares are outstanding.
  7. The Filer has the following senior unsecured debentures outstanding:
    1. US$500 million aggregate principal amount of 6.750% debentures due 2019 (the 6.750% Debentures);
    2. US$500 million aggregate principal amount of 3.150% debentures due 2022 (the 3.150% Debentures);
    3. US$500 million aggregate principal amount of 3.500% debentures due 2023 (the 3.500% Debentures);
    4. US$550 million aggregate principal amount of 3.375% debentures due 2025 (the 3.375% Debentures);
    5. US$125 million aggregate principal amount of 7.800% Debentures due 2027 (the 7.800% Debentures);
    6. US$450 million aggregate principal amount of 4.125% debentures due 2035 (the 4.125% Debentures);
    7. US$300 million aggregate principal amount of 7.125% debentures due 2036 (the 7.125% Debentures);
    8. US$500 million aggregate principal amount of 6.125% debentures due 2041 (the 6.125% Debentures);
    9. US$500 million aggregate principal amount of 4.900% debentures due 2043 (the 4.900% Debentures); and
    10. US$500 million aggregate principal amount of 5.250% debentures due 2045 (the 5.250% Debentures)

(collectively, the Debentures).

  1. All of the Debentures, other than the 7.800% Debentures, were issued pursuant to the indenture between the Filer and The Bank of New York Mellon, as successor trustee, dated as of May 16, 2006 (the 2006 Indenture). The 7.800% Debentures were issued pursuant to the indenture between the Filer and The Bank of New York Mellon, as successor trustee, dated as of January 31, 1997 (the 1997 Indenture and, together with the 2006 Indenture, the Indentures). There is no obligation in the Indentures for the Filer to maintain its status as a reporting issuer and no prohibition on ceasing to be a reporting issuer.
  2. The Debentures were offered in the United States pursuant to shelf registration statements in the United States and were not distributed in Canada.
  3. Each series of the Debentures has been assigned a ticker symbol (each, an OTC Ticker Symbol) by the U.S. Financial Industry Regulatory Authority (FINRA). Because the Agrium Shares no longer trade on the TSX, the Filer constitutes an "OTC issuer" and an "OTC reporting issuer" under MI 51-105.
  4. Each OTC Ticker Symbol was assigned without the Filer's involvement. The Filer does not carry on any activities that would constitute promotional activities under MI 51-105.
  5. On March 12, 2018, Nutrien announced offers to the holders of the Debentures to exchange the Debentures (collectively, the Obligor Exchange) for senior unsecured notes of Nutrien (Nutrien Notes). The completion of the Obligor Exchange was subject to certain conditions. The distribution of the Nutrien Notes pursuant to the Obligor Exchange was qualified under a prospectus supplement to the short form base shelf prospectus of Nutrien dated March 12, 2018, in Canada, and under a registration statement, in the United States, as supplemented (collectively, the Prospectus).
  6. Also on March 12, 2018, Nutrien announced solicitations of consents (the Consent Solici-tation) from the holders of the Debentures to certain amendments to the Indentures, including removal of certain contractual disclosure obligations (the Reporting Covenants), pursuant to which the Filer was required to deliver to the trustee and the holders of Debentures certain annual and quarterly disclosure documents. The Prospectus contains a notice to the holders of the Debentures that the Filer was going to apply to cease to be a reporting issuer in each province of Canada.
  7. On April 9, 2018, Nutrien announced the results of the Obligor Exchange and Consent Solicitation. Each Obligor Exchange and related Consent Solicitation in relation to the Debentures, other than the 7.800% Debentures, was successful and Nutrien Notes were issued in exchange for the Debentures validly tendered to the Obligor Exchange on April 10, 2018. The aggregate principal amount of each series of Debentures validly tendered and not withdrawn to the applicable Obligor Exchange and related Consent Solicitation was as follows:
    1. 6.750% Debentures – 91.99%;
    2. 3.150% Debentures – 95.81%;
    3. 3.500% Debentures – 98.41%;
    4. 3.375% Debentures – 97.07%;
    5. 4.125% Debentures – 97.38%;
    6. 7.125% Debentures – 97.64%;
    7. 6.125% Debentures – 99.43%;
    8. 4.900% Debentures – 99.76%; and
    9. 5.250% Debentures – 93.11%.
  8. On April 10, 2018, the Filer entered into a supplemental indenture to the 2006 Indenture (the 2006 Amending Indenture) which amended the 2006 Indenture to implement the amendments sought by the Filer under the Consent Solicitation, including removal of the Reporting Covenants of the Filer. Any Debentures, other than the 7.800% Debentures, which were not exchanged for Nutrien Notes under the Obligor Exchange continue to be governed by the 2006 Indenture, as amended by the 2006 Amending Indenture.
  9. On April 9, 2018, Nutrien announced that it was: (i) terminating the Obligor Exchange and Consent Solicitation in relation to the 7.800% Debentures; and (ii) soliciting consents from the holders of the 7.800% Debentures to replace the Reporting Covenants by the Filer with Reporting Covenants by Nutrien. On April 17, 2018, the Filer entered into a supplemental indenture to the 1997 Indenture (the 1997 Amending Indenture) which amended the 1997 Indenture to remove the Reporting Covenants of the Filer. All 7.800% Debentures continue to be governed by the 1997 Indenture, as amended by the 1997 Amending Indenture.
  10. All of the Debentures are held in book-entry only form and are registered in the name of The Depositary Trust Company or its nominee (DTC), with beneficial interests therein recorded in records maintained by DTC and its participants as financial intermediaries that hold securities on behalf of their clients. The Filer engaged D.F. King Ltd. (D.F. King) to ascertain the beneficial ownership of the Debentures, including the number of beneficial holders and their province of location following the completion of the Obligor Exchange.
  11. D.F. King prepared its report to the Filer respecting the holders of the Debentures (the Securityholder Report) following a review of the depositary positions identified by DTC and through a geographical analysis report prepared by Broadridge Financial Solutions Inc. (Broad-ridge) as to the beneficial holders of the Debentures. The Securityholder Report provides proprietary information on the various constitu-encies holding the Debentures as of April 10, 2018.
  12. Based on the information contained in the Securityholder Report, following the Obligor Exchange, Debentures are beneficially held by 24 holders in Canada who hold US$1,365,000 of the US$142,455,000 aggregate principal amount of the outstanding Debentures or 0.96% of the aggregate principal amount of the outstanding Debentures and represent 1.54% of the total number of holders of the Debentures worldwide.
  13. The Filer is applying for an order that the Filer has ceased to be a reporting issuer in all of the jurisdictions of Canada in which it is a reporting issuer. The Filer is not eligible to file under the simplified procedure in section 19 of National Policy 11-206 Process for Cease to be a Reporting Issuer Applications because the Filer's outstanding securities, including debt securities, are beneficially owned, directly or indirectly, by more than 15 securityholders in the province of Québec and more than 51 securityholders in total worldwide.
  14. Based on the information contained in the Securityholder Report, residents of Canada do not: (i) directly or indirectly beneficially own more than 2% of any class or series of outstanding securities (including debt securities) of the Filer worldwide, and (ii) directly or indirectly comprise more than 2% of the total number of securityholders of the Filer worldwide.
  15. The Filer has no intention to seek a financing by way of an offering of its securities in Canada.
  16. The Filer has no securities outstanding other than the Agrium Shares and the Debentures. The Debentures are not convertible or exchangeable into Agrium Shares or other securities of the Filer.
  17. Other than the Debentures, no securities of the Filer, including debt securities, are traded in Canada or another country on a marketplace as defined in National Instrument 21-101 Market-place Operation (NI 21-101) or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.

Order

Each of the Dual Exemptive Relief Decision Makers and the Coordinated Exemptive Relief Decision Makers is satisfied that the order meets the test set out in the applicable securities legislation for the relevant regulator or securities regulatory authority to make the order.

The decision of the Dual Exemptive Relief Decision Makers under the applicable securities legislation is that the Reporting Issuer Relief is granted.

The decision of the Coordinated Exemptive Relief Decision Makers under the applicable securities legislation is that the OTC Relief is granted provided that the Filer does not do either of the following:

  1. carry on activities that would constitute promotional activities under MI 51-105; or
  2. request an OTC Ticker Symbol or request that any class of its securities be traded on the U.S. over-the-counter markets, any marketplace as defined in NI 21-101 or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.

“Tom Graham, CA”
Director, Corporate Finance
Alberta Securities Commission