Info wanted on WIT deal

The potential sale of Weyburn Inland Terminal has sparked concern among producers and shareholders who say the process aimed at selling the farmer-controlled grain handling facility is flawed.


The group is demanding that the Weyburn, Sask., terminal’s board of directors hold a shareholder information meeting before WIT’s annual general meeting to offer details of the potential sale and explain the reasons behind it.


It says shareholders and farmer customers who deliver grain to the terminal have been offered little information about the sale, which has fueled speculation.


WIT said in a Dec. 13 news release that the company’s board of directors had decided to “pursue expressions of interest regarding the potential sale of some or all of the company.”


The same day, WIT announced that two of its board members — Allan Richards and Dale Mainil — had resigned from the board, citing fundamental disagreement with the board’s decision to explore a potential sale.


A letter was also circulated to WIT shareholders informing them of the potential sale, but concerned shareholders say it contained no information about reasons for the sale.


“We think a sale is a huge mistake,” said a committee of concerned producers and investors.


“We feel that there should be a conversation to discuss the how and why of a potential sale.”


According to its news release, WIT has received several non-binding expressions of interest from parties interested in buying the company.


The board has since decided to investigate opportunities to sell all or part of the company, whose assets include a 105,000 tonne grain terminal, crop input retail operations, a specialty crop processing company near Sedley, Sask., and a Weyburn based ethanol plant, NorAmera BioEnergy Corp.


WIT officials said they are negotiating a potential deal but there is no firm timetable for an agreement.


Company officials have said some shareholders have expressed concerns about their shares’ lack of liquidity on the over-the-counter market. The company has 5.5 million shares outstanding. WIT shares were trading recently at about $13, giving the company a market capitalization of $70 million.


In the nine months ending Sept. 30, 2013, WIT posted earnings of $1.6 million, compared with $1.14 million for the same period last year.


Dale Cugnet, a Weyburn area farmer who is part of the concerned shareholders group, said the ethanol plant has been a drain on the company’s bottom line and on shareholders’ equity.


“(But) there are better ways to address that problem than to just sell the whole company and take the money and run,” he said. “The ethanol plant investment was a huge mistake, but if WIT sorts this out and returns and sticks to its core businesses, we feel its best days are still to come.”