Comtrax Logistics Solutions Inc. was going to be a grain-handling facility with transloading capability for other commodities
Investors in a proposed commodity hub near Weyburn, Sask., will get about half of their investment back after the board and shareholders unanimously agreed to wind up the company.
Comtrax Logistics Solutions Inc. was proposed in 2016 as a grain-handling facility with transloading capability for oil, fertilizer and aggregate. It would have cost about $75 million.
President Mark Bratrud said the decision not to go ahead was mainly due to economic conditions and trade uncertainty.
“The biggest things that led to the decision were we had some opportunities that we felt were going to transpire positively that didn’t,” he said.
“The first one was with an oil company that in the beginning of the downturn was suddenly bought out by another company, which changed things there. The second was with a grain company that we went fairly far down the road with that didn’t work out either.”
Bratrud said the oil downturn was the biggest factor and when the board looked at doing a grain facility alone the economics didn’t work.
“We could make a case for it being profitable in the five to seven percent return on investment but at the end of the day to take that to investors to put a pile of money in, we just didn’t feel it was showing a strong enough result to give us confidence,” he said.
Ongoing trade issues and political and economic uncertainty “made everybody feel uncomfortable,” he said.
Winding up now means investors can get some money back, less the costs of the feasibility study, legal and accounting costs, environmental assessments and other costs.
Initially the proponents, which included seven producers, asked for $1 per acre from farmers in the southeastern part of the province to fund the feasibility study, which was estimated to cost $600,000.
An initial share offering to raise $500,000 was oversubscribed.
While Comtrax is on ice for now, Bratrud said there is interest in looking at opportunities if the time is right.
“If there’s an opportunity that comes in the future and the economics and everything look brighter, then we’re fully prepared to pick up where we left off,” he said.