The Saskatchewan government’s ownership stake in Big Sky Farms has dropped by more than 20 percent as a result of the company’s recent court-approved financial restructuring.
Officials at the province’s CIC Asset Management confirmed that the government’s equity stake in Big Sky has now fallen to 42.7 percent from 62.8 percent.
Big Sky, Saskatchewan’s largest hog producer, was granted protection from its creditors late last year. It has since restructured its finances in an effort to stay afloat.
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Saskatchewan taxpayers have invested $30 million in Big Sky since the company was formed in the mid-1990s.
About $26.3 million was invested before 2007 by the former NDP government. Another $3.5 million was extended as a repayable loan in late 2007. The province’s initial $26.3 million equity investment represented a 62.8 percent ownership share in the company.
However, information obtained by the Western Producer confirmed that the dilution of existing equity – a key part of Big Sky’s restructuring plan – reduced the government’s ownership stake to 3.1 percent.
The $3.5 million loan was also converted into equity, representing a 39.6 percent ownership stake in the restructured company and bringing the government’s total ownership stake to 42.7 percent.
An estimated book value of the government’s equity was not available before the Western Producer’s publication deadline.
Government sources confirmed earlier this year that the value of Big Sky’s assets has fallen over the past year and the book value of the province’s equity in Big Sky will be written down by government accountants.
