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Canada’s Legumex Walker Considering Sale, Other Strategic Moves

After an announcement that its shares were undervalued and two directors resigned, Canada’s Legumex Walker Inc., which owns an 84% stake in Washington State-based canola crushing operation, Pacific Coast Canola, (Glencore Plc owns the remaining shares) has announced it is considering a total sale of the company, or an asset sale, financing or merger.

Legumex Walker’s financial performance has been held back by railway bottlenecks slowing canola deliveries to its Warden, Washington crushing facility and the operation’s slow build-up to full production. The Winnipeg-based Legumex posted a loss of C$13.1 million for the first nine months of 2014 and was carrying C$82.2 million in long-term debt as of September 30.

Immediately following its announcement that it is open to takeover bids, Legumex Walkers shares jumped 16% in one day to C$3.15 per share. The group has "significant strategic value, and we believe there are potential opportunities to crystallize significant value for shareholders” said Bruce Scherr, the Legumex Walker chairman, in a recent AgriMoney report.

In October 2014, the company forged an agreement with grain handler, Scoular Co. to source canola seed for its crushing plant and to market its canola oil and meal.

Legumex, which also owns 15 crop processing plants across the Canadian prairies, the U.S. Midwest, and China, has stated that there is no set schedule for evaluating alternative courses of action.

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Lynda Kiernan is Editor with HighQuest Group Media and of the Oilseed & Grain News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@highquestgroup.com.

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