The Saskatchewan Agri-Food Equity Fund has bought a larger equity position in TML Foods Inc. in Melfort, Sask., in an attempt to turn the meat processor’s financial fortunes.
On March 6 TML and the equity fund, a program of the provincial agriculture department, announced the fund had taken over all loans the processor had with the CIBC bank.
As part of the fund’s acquisition of the company’s debt to CIBC, company founder Harold Thomson and son Lorne Thomson have agreed to sell to the fund in a private transaction 11,750,048 common shares, a company news release said.
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These shares will give the fund approximately 35 percent of the company’s total outstanding common shares on a non-diluted basis.
Lorne Thomson has resigned as a director and stepped down as president and chief executive officer of the company, but will remain to direct marketing and sales for its wholly owned subsidiary, Thomson Meats Ltd.
Harold Thomson will remain on the board, but will step down as chair.
Paul Marciniak of Agri-Food Equity Fund, has been appointed to the position of acting president and CEO.
“From all indications I’ve had from Mr. Thomson, this has been a very amicable solution,” said Marciniak from Melfort.
The changes announced last week had their roots in TML’s expansion in 1995, funded by the fund and loans from CIBC.
“The company had experienced losses since that time and as a result, in an attempt to shore up the financial fortunes of the company, the equity fund bought out the position of the bank.
“So now, the largest single shareholder is the only creditor of the company.”
Marciniak said the debt now held by the equity fund will likely be rescheduled to give TML a better chance at turning a profit.
He said the company has a line on new business, “and some of the existing lines of business are stabilizing and our efficiencies are improving.”
Marciniak will be president until a permanent replacement can be found.
He and Carl Neggers, executive director of the fund, along with Monique Lischynski of the fund, and Sam McCullough, a lawyer living in Outlook, Sask., have been appointed to the board pending the next annual shareholders meeting. It is tentatively scheduled for June 11.
