Potential owners of Big Sky Farms have until Nov. 9 to outbid Olymel, which last week offered $65.25 million for the troubled Saskatchewan-based hog producer.
The receiver, Ernst and Young, expects other bidders to step forward now that a judge has approved the sale process, which included the selection of Olymel as a stalking horse bidder.
The company was chosen, after a competition with another company, to make the first bid as a way to maintain the value of Big Sky’s assets before a bankruptcy sale, said Kevin Brennan of Ernst and Young.
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Court documents said this type of sale process would instill confidence in the company and the industry.
Big Sky entered receivership in September after the U.S. drought and escalating feed costs resulted in losses of up to $50 per pig, although court documents also show it never recovered from a restructuring process initiated in 2009.
The company, with facilities in Saskatchewan and Manitoba, owes secured creditors about $69 million and suppliers another $8.4 million.
If successful, Olymel would be entering a new business as a hog producer.
Based in St. Hyacinth, Que., it operates slaughter and processing facilities mainly in that province but also has a bacon plant in Ontario and a slaughter and processing plant in Red Deer, Alta.
The private company, which also includes poultry processing, has 10,000 employees and a weekly pig capacity of 160,000.
Sales in 2010 were $2.1 billion and half its revenue comes from international sales to more than 60 countries, according to the company website.
Meanwhile, a Manitoba court extended creditor protection for Niverville-based Puratone Corp. to Nov. 2 while the monitor, Deloitte, looks for a buyer.
The company owes $86 million to secured creditors Farm Credit Canada, Bank of Montreal and Manitoba Agricultural Services Corp. There are also many unsecured supplier creditors.
As many as three offers were expected to be submitted by Oct. 15 and dealt with in court by Oct. 22.
