A Regina judge last week extended Worldwide Pork’s court protection from creditors for a fourth time, but said he wants to see some progress by Oct. 27.
Queen’s Bench justice Dennis Ball heard a general outline of the Moose Jaw packer’s plan to reopen the plant, closed since mid-May after producers stopped shipping hogs because they weren’t being paid.
“The court is wanting some progress and some developments with respect to the overall financing issues, including the new debt, new equity and the producer side of things,” said Worldwide lawyer Rick Van Beselaere.
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Ontario consulting firm Mallot Creek has conducted a preliminary evaluation of Worldwide’s proposed business plan. It was presented to the court last week.
The plan recommends an ownership structure with two share classes: 57.5 percent would be owned by current and new investors through Class A investment shares and 42.5 percent would be owned by producers through Class A production shares.
The production shares would cost $13 each and require producers to deliver one hog per share per year. Total producer investment would be about $3.5 million.
Mallot Creek said the cost is competitive and “salable” because producers are looking for opportunities to vertically integrate.
The consultant also said a planned expansion should be phased in. The production of fresh chilled pork, in addition to frozen product, should begin within six months of the plant reopening, followed by a decision in the second year on whether capacity should be doubled.
While the company wants to reopen on Jan. 1, 2006, Mallot Creek said supply is critical.
“WWP will need to ensure supply of at least 90 percent of capacity before operations commence,” said the report, noting that government support is essential.
