High feed costs and the resulting downturn in the hog sector have left one of Manitoba’s major hog production companies seeking shelter from its creditors.
The Puratone Corp., based at Niverville, about 25 km south of Winnipeg, sought and got creditor protection Wednesday in Winnipeg at Manitoba Court of Queen’s Bench while it undergoes financial restructuring.
The court order — which covers Puratone plus its subsidiaries Pembina Valley Pigs and Niverville Swine Breeders — stands until Oct. 12 at the earliest, staying any legal action that its creditors could otherwise take.
The companies haven’t yet filed a restructuring deal or any other arrangement for the court’s approval. When they do, their court-appointed monitor, Brent Warga of Deloitte and Touche in Winnipeg, will invite creditors to file claims.
Amounts owing to the companies’ listed creditors range from $16.80 to as much as $5 million. Their secured creditors, Bank of Montreal (BMO) and Farm Credit Canada, are owed over $40 million each.
The Manitoba Pork Council noted earlier in September that the province’s barns, which housed 316,000 sows earlier this summer, have seen 16,000-18,000 sows "exiting the industry" since the beginning of July.
Between direct and spinoff employment, "Manitoba could eventually see over 650 jobs lost – with more losses to come," the council said in a newsletter last Friday.
The Canadian Pork Council said it has the approval of federal Agriculture Minister Gerry Ritz to set up an industry panel to "identify the measures to assist the hog sector through the coming months of expected heavy losses."
Puratone, which began in 1973 as a livestock feed miller and supplier, now bills itself as one of the largest hog production companies in North America, with over 40 farms and about 28,000 breeding sows in its system, and marketings of over 500,000 hogs per year.
Puratone also operates three mills processing about 250,000 tonnes of feed per year.
Puratone’s protection order follows Monday’s ruling from Saskatchewan Court of Queen’s Bench in Saskatoon, putting that province’s top hog producer, Big Sky Farms, into receivership at the request of creditors including Scotiabank, BMO, National Bank of Canada and FCC.
High feed costs push Big Sky into receivership, Sept. 11, 2012