Ag Growth's shares slide after grain bin collapse at West Coast terminal

Shares slide after collapse

Shares in Ag Growth International Inc. continue to fall on the Toronto Stock Exchange Wednesday after a newly developed commercial grain storage bin it manufactured collapsed while being filled at North Vancouver's Fibreco Export Inc. terminal.

The Winnipeg company says the cause and responsibility for the incident last Friday afternoon is not known and therefore it is unable to determine if any financial damage will result.

Ag Growth's shares were down as much as $4.07 or 12.9 per cent at $27.55 on Wednesday after falling 9.1 per cent on Tuesday after the company posted a statement about the i.

Fibreco said in a statement posted on its website on Saturday the bin collapsed due to a "structural failure " during loading. It says no one was injured.

The terminal company, owned by a consortium of forestry firms, announced in 2018 it would add bins and other equipment as part of a plan to replace the shipping of wood chips with agricultural products while continuing to export wood pellets.

Ag Growth said the bin that collapsed is part of a new product line it developed for two commercial projects, adding 15 of the bins are located at Fibreco and an additional 20 have been manufactured for another customer but have not yet been commissioned.

It says it plans to investigate all bins in the product line.

"We have not updated our estimates at this point, given that it is difficult to estimate what (if any) the financial impact could be as the cause and any responsibility for the incident are not yet known. But clearly this issue is an overhang for AFN’s share price," said CIBC analyst Jacob Bout in a note to investors.

He pointed out Ag Growth previously spent about $20 million on project rework at the same site due to a design flaw, although that's not believed to be related to the collapse.

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