Three separate buyers are poised to take up the Prairie assets of ill-fated W.A. Grain’ and Pulse Solutions, pending an Alberta judge’s approval.
An application went Thursday for approval before Justice Corina Dario of Alberta Court of Queen’s Bench in Calgary, from BDO Canada, the receiver for the Alberta-based grain and pulse handler and processor. BDO seeks approval for:
the sale of W.A. Grain and Pulse Solutions’ three processing plants in southwestern Saskatchewan, at Vanguard, Pambrun and Ponteix, to GP Acres Grain, an affiliate of the Vancouver-based Canadian arm of multinational grain trading firm Adroit Overseas; the sale of W.A. Grain’s processing plant at Bowden, Alta., about 40 km south of Red Deer, to Toronto-based pulse and special crops processor Global Food and Ingredients (GFI); and
the sale of W.A. Grain’s plant at Bashaw, Alta., about 60 km south of Camrose, to a numbered company, 2371394 Alberta Inc.
The proposed financial terms for all three sales were redacted in documents posted on BDO’s website. BDO described all three offers as the highest received for the respective plants.
W.A. Grain’s remaining processing plant, the New Leaf Essentials facility at Summerside, P.E.I., is in a separate receivership proceeding.
For that plant, receiver PricewaterhouseCoopers published an invitation for offers June 15 with a deadline of Aug. 13, but hasn’t yet named a successful bidder.
No details were given in BDO’s application about the ownership of 2371394, but both Adroit and GFI are already active in Prairie grain and pulse processing.
For its Canadian assets, Adroit — which deals in peas, lentils, dry beans and chickpeas — operates a grain elevator and pulse cleaning plant at Neville, Sask., about 50 km south of Swift Current.
GFI, meanwhile, sources peas and other pulse crops through two Saskatchewan terminals, at Zealandia, about 20 km east of Rosetown, and Lajord, about 35 km southeast of Regina. It also operates a processing plant at Lajord.
‘High leverage’
The move to divest W.A. Grain’s handling and processing assets comes after the Innisfail, Alta.-based company entered receivership in late April — about a week after its licenses were suspended by the Canadian Grain Commission.
W.A. Grain — which cleaned and processed peas, chickpeas and lentils for food and pet food markets in Canada, the U.S., the Middle East and Asia — was later granted temporary licenses allowing it to remove, but not to accept, inventory at its plants.
Owner Chris Chivilo told Alberta Farmer at the time that W.A. Grain had been dealing with a financial issue and had alerted the CGC to its situation.
In an affidavit in April, a representative of secured creditor ATB Financial said its turnaround and restructuring group began monitoring loans to W.A. Grain in June 2018, due mainly to “poor financial performance and history of requiring financial covenant waivers,” stemming mainly from “low gross margins, tight liquidity and high leverage.”
According to that affidavit, W.A. Grain then turned toward cost cutting and revenue diversification, focusing on organic pulses and exports to China as well as setting up the P.E.I. operation and a pet food division at Bowden.
However, ATB said, by January this year, W.A. Grain’s draft year-end financial statements were also showing “significant realized and unrealized foreign exchange hedging losses that were not previously accounted for.”
A proposed sale of the pet food division to generate working capital couldn’t close, ATB said, as another of W.A. Grain’s current secured creditors, an arm of Avrio Capital, sought a permanent paydown of part of W.A. Grain’s debt before it would consent to such a sale — but ATB was “not prepared to consent to this use of (sale) proceeds.”
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