Canada’s top grain handler is set to start feeding canola to a U.S. West Coast crushing plant now half-owned by the Prairie company’s parent firm.
Regina-based Viterra, the grain handling arm of multinational commodity firm Glencore, on Tuesday announced a supply and marketing deal with Pacific Coast Canola (PCC), a next-to-new crush plant at Warden, Wash., about 160 km southwest of Spokane.
PCC until now has been majority-owned by Winnipeg special crops processor Legumex Walker, which recently sold its special crops business to U.S. grain firm The Scoular Co. and began winding down its operations.
In court documents filed Monday, Legumex’s liquidators, Toronto-based KSV Advisory, described PCC — whose main lenders in July called in the crusher’s US$54.6 million senior credit facility — as being in a “distressed financial position.”
Legumex had thus negotiated a deal to shed its 84 per cent stake in PCC for “no cash consideration,” KSV said, other than to be granted a release from PCC’s main secured lenders and lien registrant.
Glencore — whose Glencore Grain Investment arm had already owned the remaining 16 per cent of PCC from the outset — boosts its stake to 50 per cent.
Seattle construction, design and property management firm McKinstry, which was a mechanical and electrical contractor on the construction of the Warden plant, will take up the remaining 50 per cent of PCC in a “limited liability operating agreement” with Glencore.
McKinstry, in return, has released its lien on the crush plant, Legumex said in a separate release Tuesday. AgCountry Farm Credit Services, as the representative for PCC’s lenders, agreed to repayment terms for its credit facility, which has now been “repaid and terminated,” Legumex added.
PCC, which opened at Warden in 2013 and had previously dealt with Scoular for its canola supply, is billed as the largest expeller-press canola processing facility in North America, with crush capacity for 1,100 tonnes of canola per day.
The company’s product lines include non-GMO, Halal- and Kosher-certified oils, plus canola meal as feed for dairy cattle and other livestock.
“We look forward to helping PCC achieve its full potential, through delivery of consistent seed supply, expansion of our existing relationships with thousands of canola producers to include local PCC market producers, our focus on continuous improvement, and connections with domestic and international end-users,” Viterra’s CEO for North America, Kyle Jeworski, said in a release Tuesday.
Viterra in recent years has snapped up a pair of Canadian oilseed crush plants, including the former Canadian Agra cold-press canola plant at Ste. Agathe, south of Winnipeg, and, in late 2015, the former TRT-ETGO canola and soybean crushing and refining plant at Becancour, Que., near Trois-Rivieres.
Tuesday’s deal also effectively shuts the book on Legumex Walker, which was created in 2011 from the merger of two family-owned Prairie companies, Tisdale, Sask.-based Walker Seeds and Roy Legumex of St. Jean Baptiste, Man.
The two companies had brought their special crop processing assets and the plan for the PCC plant into the new firm, which later expanded to take in Canada’s biggest sunflower processor, Keystone Grain of Winkler, Man., and stakes in the U.S. dry bean and sunflower seed markets, with deals for St. Hilaire Seed Co. and the sunflower processing assets of Anderson Seed Co.
Legumex, which in March announced it would explore “strategic alternatives” to “maximize shareholder value,” changed its legal name to LWP Capital after completing the sale of its special crops arm to Scoular in November.
The company in November said it expected to have $1.69 to $1.98 per share available for distribution to shareholders after taxes and other expenses were paid down.
LWP said Tuesday it has formally adopted its liquidation and dissolution plan, its shares were delisted from the TSX effective last Thursday and it “no longer carries on as an active business.” — AGCanada.com Network