The Canadian Grain Commission has reinstated Ilta Grain Inc.’s grain dealer and primary elevator licences effective Aug 7.
The commission reinstated the license of the financially troubled grain company following the creation of a special escrow account, designed to facilitate grain sales and minimize creditor losses.
Ilta’s recently suspended grain dealer and primary elevator licences will be reinstated on the condition that company refrain from purchasing grain, receiving grain, or otherwise incurring liabilities to grain producers, says the CGC.
However, the company may sell, remove or transfer grain or grain products already held or stored at its facilities.
The commission has negotiated the creation of an escrow account that will hold money derived from the sale of already-delivered grain for which no producer cheques have been issued.
Producers who delivered grain to Ilta but were not issued payment may be compensated from this account.
The fund will be held by PricewaterhouseCoopers, the court-appointed monitor, until it has been determined how the funds will be distributed.
The CGC has visited Ilta Grain Inc.’s offices and facilities and is completing a final audit to establish the number and amount of eligible claims, said the CGC in a release.
To date, the Canadian Grain Commission has heard from more than 200 producers who are owed money.
The Canadian Grain Commission will contact any producers who have reported payment issues related to Ilta’s insolvency.
Once the commission has confirmed the producers’ contact information, it will send each producer a completed claim form to sign and return to the Canadian Grain Commission as soon as possible.
The claims process cannot move ahead without a signed claim form. Any producers who have not contacted the commission yet, but who delivered to Ilta Grain Inc. before July 11, 2019, and have not received payment, should immediately contact the Canadian Grain Commission at 1-800-853-6705.
“One of the key conditions of reinstating Ilta Grain Inc.’s licences is that Ilta is not allowed to purchase grain from producers,” said CGC’s chief commissioner Patti Miller.
“At the Canadian Grain Commission, we take producer protection seriously. We have taken several steps to protect the rights of producers who have delivered to Ilta Grain Inc. including visits by our auditors and inspectors to obtain information and documentation, starting the claims process, and negotiating an escrow agreement.”
Ilta Grain Inc. is licensed to operate primary elevators in Belle Plaine, Sask., and Saskatoon and is licensed as a grain dealer.
On July 8, 2019, British Columbia’s Supreme Court placed Ilta Grain Inc. under creditor protection because of its financial difficulties.
On July 11, 2019, the Canadian Grain Commission suspended all licences issued to Ilta Grain Inc.
The Canadian Grain Commission’s Safeguards for Grain Farmers Program regulates grain companies to mitigate the risk of payment failure to producers and to support the grain quality assurances system.
As a condition of licensing, licensed grain companies are required to tender security for outstanding grain liabilities to the Canadian Grain Commission as a bond, letter of credit, letter of guarantee, cash deposit, trust account or payables insurance.
According to court documents, Ilta’s security through CGC’s producer payment protection programs was valued at roughly $12 million.
The company owes nearly $150 million in secured and unsecured debts to roughly 450 creditors, including hundreds of farmers.
The company’s largest secured creditors are HSBC Bank Canada, which is owed more than $47 million and Farm Credit Canada which holds debts of more than $86 million.