SASKATOON – Shortly after being left at the altar by its initial partner, Mainline Terminal Ltd. has found another suitor.
A few weeks ago Pioneer Grain Co. Ltd. unexpectedly pulled out of the inland terminal being built near Moosomin, Sask., taking with it half a million dollars in potential equity investment.
But Mainline president Keith Lewis said last week the company is negotiating with Cargill Ltd. and he’s optimistic the Winnipeg-based firm will step into the breach.
“We expect that will result in them becoming our new partner,” he said, although it will likely take several months before a detailed operating agreement is put on paper.
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A Cargill spokesperson confirmed the company is negotiating with Mainline and is hopeful an agreement can be reached
“We have a track record with these and certainly in principle we’re interested in this one,” said Barb Isman. “But we do have to get through the negotiation process.”
Lewis said the last-minute pullout by Pioneer has probably set things back by three or four months.
He said the company has had no communication with Pioneer since the announcement.
“We’re no wiser today than we were the day they made the announcement,” he said, adding the two parties had a meeting just 24 hours before the pullout and nothing seemed amiss.
Pioneer officials said the withdrawal was simply “a business decision.” Company spokesperson Donna Minkus emphasized that no agreement had ever been reached.
“There was nothing finalized,” she said last week. “I don’t know how they had interpreted it but we were still in the negotiation stage.”
The operating agreement with Pioneer had provided for the company to own up to 35 percent of the equity in the terminal. The actual figure agreed to was 27 percent, representing about $500,000.
Money refunds
As required by law, Mainline has sent letters to all of its shareholders, informing them of changes in the company’s financing and giving them an opportunity to get their money back without penalty. Lewis said he expects a minimal amount will be withdrawn.
Minkus said Pioneer remains committed to the inland terminal concept. It is the operating partner at North West Terminal in Unity, Sask., and is negotiating a partnership agreement with Mid-Sask Terminal Ltd. in Watrous.
Mid-Sask president Les Saelhof said his group was “on the phone rather quickly” to Pioneer officials after hearing of events in Moosomin
“Pioneer has told us they are behind our project 100 percent and they’ll continue to be there,” he said.
Mid-Sask held a sod-turning ceremony last week to publicize the project as it continues to sell shares
The company has raised about $900,000 towards the minimum of $1.5 million which must be reached by Oct. 15. It has also sold about half the planned 330,000 bushels of condominium storage space.
