A bid to restructure the finances of an overextended mustard miller in southwestern Saskatchewan has ended with the company permanently shutting its doors.
Tom Halpenny, CEO of Mustard Capital Inc. at Gravelbourg, Sask., announced on the company’s website that MCI has "discontinued operations" as of May 4.
MCI announced in early February this year that it had filed a notice of intention to make a proposal to its creditors for restructuring of its debt.
The company, which at its peak was sourcing crops from about 250 Saskatchewan mustard growers, began work in 2010 on expansion into a second facility at Vanguard, Sask., about 55 km west of Gravelbourg.
The company had pledged $1 million to the project and also picked up just under $1 million in grants and repayable support from the federal government.
However, the company said in February, it soon suffered from a combination of "expansion cost overruns and operational losses from delayed development of its new capacity."
According to an April 5 affidavit from Halpenny, MCI got $250,000 in court-approved interim financing in February from one of its customers, Granosa AG — and since then MCI had "operated at a profit."
However, he said at the time, since February, MCI hadn’t come up with "any reasonable offers" from any interested party to buy, restructure or recapitalize the business, and the prospects of a new proposal for its creditors "have grown more remote."
The company had pledged in February to continue "business as usual" until the May 4 deadline for a new restructuring proposal.
MCI, which was a Canadian Grain Commission licensee until February, had said at the time it would provide security to farmers either by dealing through another CGC licensee or by paying cash for purchases.
Growers who’d delivered to MCI until the end of October last year were expected to get full compensation for payments they were owed, through the CGC’s payment protection program.
MCI’s Gravelbourg plant had used a "unique" milling process to produce yellow, oriental and brown mustard ingredients, mainly for use in prepared mustards, flavour enhancers, binders and extenders.
At Vanguard, MCI had planned to process "new and novel" products such as a "de-oiled and de-heated" yellow mustard.
"The shareholders’ belief in the company helped MCI establish a global reputation and build the business," Halpenny said on the company’s website last week. "The staff remained dedicated to the very last day of operation."
Mustard growers who supplied the plant "never wavered despite the public disclosure of MCI’s financial difficulties," he added.
Anyone with an interest in MCI’s assets or other details was asked to contact Ian Schofield, senior vice-president with Meyers Norris Penny’s (MNP) insolvency and corporate recovery practice in Regina.
Schofield was not immediately available for comment Tuesday.
Insolvent Sask. mustard miller’s suppliers paid: CGC, April 23, 2012