Oakland, California—November 30, 2000—Bionova Holding Corporation (AMEX: BVA) announced today its planned business and financial restructuring program. As outlined below, the program includes the sale of the Company’s fresh produce business and a financial restructuring consisting of a capitalization of all remaining advances made by Savia to the Company, the issuance of a new set of rights to the Company’s minority stockholders, and assurance of funding for the 2001 calendar year. Moving forward Bionova Holding will focus on its functional genomics activity.
Savia has agreed to acquire Bionova Holding’s fresh produce business for $48 million plus the assumption of all of the debt and liabilities of the fresh produce business. The proceeds of this transaction will be used to immediately pay $48 million of the advances made by Savia to Bionova Holding. In acquiring the fresh produce business Savia will purchase 100% of the shares held by Bionova Holding in Agrobionova, S.A. de C.V., and International Produce Holding Company. Agrobionova is a Mexican subsidiary which conducts the Company’s farming business and owns land and other production facilities in Mexico. Agrobionova also is the majority owner of Interfruver de Mexico, S.A. de C.V., which engages in the business of marketing and distributing fresh produce in Mexico. International Produce Holding Company owns total or majority interests in sales and distribution companies in the United States and Canada. Savia will also acquire certain assets held by DNA Plant Technology Corporation or its subsidiaries, including the brand names and germplasm, currently being used in connection with the fresh produce business.
Savia further agreed to capitalize all of the remaining advances it has made or will continue to make prior to year-end 2000 to Bionova Holding Corporation. The consideration Savia will receive is newly issued Bionova Holding Corporation common stock (or preferred stock that will be converted into common stock as soon as a sufficient number of shares of common stock are authorized) at a valuation of $2.75 per share of common stock.
Bionova Holding indicated that the rights transaction and any associated obligations stemming from the 1998 Stock Purchase Agreement between Bionova International, Inc. and Bionova Holding Corporation will be modified. As part of the business and financial restructuring program, and in lieu of the rights previously contemplated, each stockholder (other than Savia) will receive rights to purchase two shares of Bionova Holding Corporation common stock for each share they own as of the date the registration statement is declared effective. The exercise price for the rights will be $2.50 per share. The rights will expire 30 days after issuance. It currently is anticipated that the effective date of the registration statement will occur in April or May of 2001.
When the business and financial restructuring program is completed, Bionova Holding will have a unique and sole focus on its technology business. The core strategy underlying this technology business going forward is as follows:
The convergence of genomics and plant biology has revolutionized the biotechnology landscape and product development pipeline by providing an enormous array of gene leads for value creation. However, genomics alone does not directly create value for seed, food, chemical or pharmaceutical companies. Gene leads must be screened and validated in order to extract their potential value as products. Bionova Holding seeks to be the leading developer of prototype and commercial crop traits, as well as targets for agricultural chemical discovery, by industrializing the process of target validation through gene profiling, bioinformatics and expertise in plant biology. By combining gene access and genomics tools with a bioinformatics platform, advanced gene expression tools and efficient trait evaluation techniques, Bionova Holding will create transgenic alleles and constructs that deliver proven trait value to customers.
Bionova Holding seeks to integrate the processes of gene discovery, trait development and early product development through alliances with companies that complement its own capabilities. Through determining the function of genes in model systems, Bionova Holding will pursue discovery and validation of gene leads that deliver resistance to economically important insect and nematode pests and fungal diseases in production agriculture. These novel traits can be licensed for use in elite germplasm in horticultural and agronomic crops. Further, as an aging population increasingly recognizes the role of diet and nutrition in health maintenance, fruits and vegetables remain an important means to deliver improved nutrition to consumers. Bionova Holding seeks to be a leading provider of plant-based technology to improve the nutrition and health-promoting components of foods. Additionally, Bionova Holding can provide technology services, such as collaborative or contract research, in support of genetically engineered products, strategies and crop-protection chemical discovery.
During the negotiations between Savia and Bionova Holding’s Special Committee of Independent Directors, Savia stipulated that it expects the “new” Bionova Holding that emerges from this business and financial restructuring to become financially independent of Savia in a short period of time. Recognizing, however, that new sources of financing will need to be arranged, Savia agreed that to the extent not funded from other sources, it will fund Bionova Holding’s operating expenses and overhead through December 31, 2001. It presently is anticipated this funding will not exceed $6 million. In exchange for this cash support in 2001, Savia will receive common shares of Bionova Holding Corporation at the time of such funding. If funded prior to the expiration of the rights being issued to the minority shareholders, the number of shares received by Savia will be calculated by dividing the funds advanced by $2.50. If funded after the expiration of the rights, the number of shares to be received by Savia will be calculated by dividing the funds advanced by the higher of the market value of Bionova Holding Corporation common stock or $2.50.
“While the planning and negotiation of the restructuring program took longer than expected to complete, I am extremely pleased with the conclusion that was reached,” stated Bernardo Jimenez, Chief Executive Officer of Bionova Holding. “Once the transactions are completed we will be in a much stronger financial position and dedicate ourselves to the development and delivery of advanced trait genomics products and services. While the challenges ahead will be significant, this is an important step forward for the Company, its employees, and our shareholders.”
The business and financial restructuring program remains subject to various conditions, including execution of definitive agreements and stockholder approval of the sale of the fresh produce business. The stockholders will also be asked to authorize additional shares of common stock to be issued as part of the program. Bionova Holding will also file a proxy statement and a registration statement relating to the rights offering, both of which will be subject to review by the Securities and Exchange Commission.
Bionova Holding Corporation is a leading biotechnology company providing unique capabilities focused on crop protection traits, pesticide discovery, nutraceutical and genetically engineered foods through high-efficiency gene profiling, bioinformatics and expertise in plant biology. Bionova Holding and its subsidiaries have strategic alliances and licensing agreements with some of the world’s leading agricultural companies, with its affiliates, including Seminis Vegetable Seeds, Inc., with value-added producers and marketers, and with biotechnology research groups. Bionova Holding Corporation is majority owned by Mexico’s SAVIA, S.A. de C.V. (NYSE: VAI), whose subsidiaries include the world’s biggest vegetable seed company.
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: competitive factors, agribusiness risks, governmental and economic risks associated with foreign operations, public acceptance of genetically-engineered products, commercial success of new products, proprietary protection of and advances in technology, possible need for additional financing, as well as the ability of the Company to successfully integrate recent acquisitions and its management information systems and controls. Further information on the factors that could affect the Company’s financial results is contained in the Company’s Form 10-K for the year ended December 31, 1999 which has been filed with the Securities and Exchange Commission.