Lake Diefenbaker Potato Corporation’s three secured creditors have determined what they’re going to do with the bankrupt company’s assets.
A lot of the equipment was auctioned off a few weeks ago, which left four facilities to deal with. Sask Water has bought three of those structures for $1.225 million.
The Royal Bank and the Farm Credit Corporation had claims on those three assets – the fresh pack facility, the flaking plant and the Coteau Hills potato storage building.
Sask Water then sold the fresh pack facility for $1 million to Pak-Wel Produce, an Alberta-based supplier of fresh potatoes.
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Ron Styles, president of Sask Water, said the other two structures will be sold in due course. He is confident they will be able to recover the remaining $225,000 since the original construction cost of those two facilities was $2.3 million.
Styles said Sask Water was forced to step in and buy all three assets to secure Pak-Wel’s involvement in the Saskatchewan potato industry. The other two secured creditors wanted to sell the three structures as a package, but Pak-Wel only wanted one facility.
The fourth structure is the Lucky Lake storage facility, a former Spudco property. Sask Water has taken that building back.
When all is said and done, Sask Water is facing a loss of $3.5 million resulting from the LDPC bankruptcy, far lower than the original estimate of $8 million That’s because the former Spudco storage facility is back on the crown corporation’s books.
“No loss had to be taken on the building because the building itself wasn’t sold for anything less than the original value,” said Styles.
