ILTA Grain, a pulse exporter based in Surrey, B.C., with a number of handling facilities in Saskatchewan, including Swift Current, has been granted creditor protection by the Supreme Court of British Columbia.
The application for creditor protection under the Companies’ Creditors Arrangement Act (CCAA) was granted on July 8 and the company sent letters to grain suppliers, vendors and suppliers on July 9 to inform them of the situation.
“The decision to file for creditor protection was not taken lightly, but is a necessary step for the company to address its financial affairs,” CEO Dan Burneski wrote in the letter to vendors and suppliers. “We found it necessary to initiate the CCAA filing in order to support our efforts to restructure our operations and secure additional financing to fund the continued development of our business.”
He noted the company will remain in control of its property and business as a result of the CCAA filing, but it now operates under the supervision of the court-appointed monitor, Pricewaterhouse Coopers.
The current management will lead the restructuring process and continue to operate the business. Burneski noted in the letter to vendors and suppliers that they intend to pay for any goods and services provided to the company on and after July 8. In the letter to grain suppliers he wrote that all balances outstanding prior to the filing date are stayed and will not be paid by the company.
“We are taking steps to work with the Canadian Grain Commission to protect producer’s rights, realize on their security and to help our suppliers through the claims process to recover these amounts,” he noted.
The Canadian Grain Commission issued a news release to announce the suspension of licences to ILTA Grain. Anyone who is owed money by this company for grain deliveries is advised to contact the Canadian Grain Commission. Those who continue to do business with ILTA Grain after July 10 will not be protected by security under the Canada Grain Act.
In the petition to the Supreme Court of British Columbia, dated July 7, the company stated that crops are sourced directly from a network of thousands of farmers in western Canada. Crops are processed in its own facilities and the processed pulse products are exported to over 40 countries. The largest markets currently are China, Southeast Asia, the Middle East and North Africa.
The company’s six grain and specialty crop handling facilities in Saskatchewan are located at Cut Knife, North Battleford (two sites), Regina, Saskatoon, and Swift Current.
The Swift Current facility had a major expansion in 2016 to increase annual capacity to approximately 60,000 metric ton of specialty grain and with storage capacity of over 6,000 metric ton of cleaned and raw crops.
ILTA Grain employs approximately 111 non-unionized full-time and part-time salaried and hourly employees, of which 95 are in Saskatchewan and 16 in British Columbia.
The company stated in the court submission that the financial difficulties are due to increasingly challenging international trade conditions, which has caused a reduction in revenues and limited the ability to repay and service its debt load.
“For instance, over the past few years, several countries, such as India, China and Saudi Arabia, which represented a significant portion of ILTA’s export market have decided to limit, and in certain cases, entirely discontinue their Canadian imports, which has significantly affected ILTA’s business model and profitability,” the court submission noted.
As a result of the court order granted to ILTA Grain on July 8, all creditors cannot start or commence any proceedings against the company until Aug. 7, subject to any extensions of the initial stay that may be granted by the court through follow-up applications by the company.
ILTA Grain made another application to the court on July 19. The court approved the company’s sale and investment solicitation plan, a $8 million interim financing agreement, and an increase in the monitor’s powers. A comeback hearing has been set for Aug. 6.
Updates about the company’s restructuring are provided on the Pricewaterhouse Coopers website at: www.pwc.com/ca/ilta-grain