Milligan BioFuels shuttered

Milligan BioFuels has entered receivership.

The company from Foam Lake, Sask., was well known in Western Canada for its ability to take oilseeds that were mostly destined for farm pits and turn them into useful products.

The company that is managing Milligan’s finances has suggested that it will be entertaining offers to sell it as a going-concern.

Mark Kelly of Hardie and Kelly in Calgary said he has been hearing from a lot of producers about oilseeds they had planned to deliver over the next month.

“Most of the farmers delivering lately had put Milligan on a COD-basis and were paid, we think,” he said.

A pioneer in Canadian biodiesel, Milligan was developed through local initiatives and technologies from the University of Saskatchewan and Agriculture Canada.

With products such as fuel conditioners, penetrating oils and road dust suppressants, the company served a need for producers looking to deal with otherwise difficult to market heated canola or harvests such as last spring’s overwintered crop.

Last week, an Alberta court granted an application from Alberta public lender Alberta Treasury Branches, which pushed the Saskatchewan company onto the road to potential bankruptcy.

ATB holds a $6 million mortgage on the Foam Lake facility, as well as an operating loan and a letter of credit, and the lender said in an affidavit filed at the end of last month it felt the need to act quickly to ensure its interests were protected.

Producers were hauling canola to the facility as recently as a few days before its closure, and several noted on Twitter that they had been paid for their deliveries.

Others said they were booked to deliver, but the only contact they had with the company about its business suspension was a recorded message on Milligan’s telephone system informing callers that the company was placed into receivership Feb. 2 and that all staff had been terminated.

Secured creditors include ATB, a Calgary-based energy firm, where the chair of the Milligan board appears to be a principal, and several smaller equipment providers.

“I expect we will hear from others with claims,” said Kelly.

Milligan is capable of producing more than 20 million litres of biodiesel annually, using more than 50,000 tonnes of canola.

The business employed about 45 people in its Foam Lake operations and had sales staff in other locations, including Red Deer.

Members of Milligan’s board were contacted for this story but didn’t comment other than to say it was “a shame” and that the “whole story will be better known in the near future.”

For more information contact Hardie and Kelly at 403-777-9999.

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