One of Canada’s largest cattle slaughter companies, XL Foods, has a bid in to buy a mothballed Alberta pork plant.
Lee Nilsson, one of the chief executive officers of Nilsson Brothers, which owns XL Foods, confirmed the company bid $3.3 million for the JTB Canadian Pork plant at Barrhead, Alta., with a $500,000 deposit. XL Foods already has plants in Calgary and Moose Jaw, Sask.
“I am confirming we have put in an offer for $3.3 million to the receiver and it awaits court approval,” said Nilsson, whose company also owns the Heartland Livestock auction network.
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Until the decision has been approved in court, possibly this week, Nilsson was unwilling to say what would happen with the $20 million, 100,000 sq. foot hog slaughtering and processing facility, originally designed to kill up to 2,000 hogs a day for the Asian markets.
“It has to go to court to be approved. Until it gets approved I don’t own anything. I’m like someone at the auction sale who’s put up his hand. I could be the runner-up bidder. The auctioneer hasn’t said ‘sold’ yet,” said Nilsson.
Earlier news reports said Nilsson had plans to turn the hog plant into a cow slaughtering plant, but Nilsson would not discuss his plans until a court agrees to the sale.
“I do not have a plant and I never once told anyone it was going to be a cow plant,” said Nilsson, who added that he saw an opportunity to put an offer on the plant at a reasonable price.
PricewaterhouseCoopers, receiver of JTB Canadian Pork, had previously accepted and received court approval of a $5.5 million offer for JTB assets from another purchaser in July, with a $1.1 million non-refundable deposit. That offer later fell through.
JTB is short for Japan, Taiwan and Barrhead. Investors from Taiwan, Japan, Vancouver and Barrhead each contributed $2.5 million to build a plant that would produce high-quality cuts for the Asian market.
Construction of the plant by Churchill Corp. subsidiary Stuart Olson Construction was stopped in February last year when it was almost complete, so investors could refinance the project.
Price Waterhousecoopers was appointed receiver in September 2002. If the sale to Nilsson Bros. goes through, Churchill will recover about $3.3 million of the $5 million in bad debt allowances on the project.
Gary Bardell, president of the Churchill Corp., declined to discuss the offer until the sale is final.
