Pacific Coast Canola Defaults on $54.6 Million; Operations at Risk
Pacific Coast Canola – a canola crushing subsidiary of Winnipeg-based Legumex Walker, has defaulted on $54.6 million putting the continuation of operations at its Warden, Washington plant in doubt.
AgCountry Farm Credit Services has called in the loan, a demand that Pacific Coast Canola cannot meet, and if Pacific cannot refinance its debt, Legumex has announced it will cease operations at the canola crushing facility.
Legumex has stated that this developing situation with Pacific Coast does not negatively affect its special crops division, which processes lentils, sunflower seeds and other crops at its 14 plants across Canada, the U.S. and China.
Legumex owns 84% of Pacific Coast Canola, which has a capacity to process 379,500 tons of canola per year. Glencore Grain Investment LLC owns the remaining 16%.
In March of this year Legumex announced it was considering selling Pacific Coast or conducting other strategic moves, as its share value did not properly reflect its inherent value.
“The entire North American canola crush industry is working within one of the lowest crush margin environments since we commissioned the canola plant in 2013,” said Legumex Walker president, Joel Horn during a conference call. And it is these tight margins that are resulting in disappointing results for the group’s oilseed division.