The issue of who will control Saskatoon-based oat processor Canamino Inc. was to be decided in a shareholder meeting May 4.
Canamino, which processes oats into cosmetic, health and pharmaceutical products, was owned by Ceapro Inc. of Edmonton.
Ceapro is a publicly traded company that has put $18.7 million into the plant, commercialization of the technology and the development of the business.
The long time it took to turn the new technology into a money-making venture put the company into rough financial waters. To improve the books and to get the money needed for a larger production plant, it wanted to raise $10 million in a share offering.
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Company officials could not be reached before press time, but they have said Ceapro had to clean up its debt in order to make the share offering more attractive.
It recently got approval from most of its creditors to convert its debt into a combination of cash and equity or shares in Ceapro.
But the Saskatchewan Government Growth Fund, which has interests in Ceapro through shares in Canamino, took actions that complicated the process. SGGF is an immigrant investors’ fund operated at arms length from the Saskatchewan government.
The growth fund is owed six months worth of dividends and redemptions, totalling about $1.5 million.
On March 27, it triggered a clause in Canamino’s articles that turned SGGF’s preferred shares into voting shares. That gave it 51 percent of the voting stock in Canamino.
Take over control
A shareholder meeting was called May 1 to allow SGGF to assume control of Canamino’s board, Ceapro said in a news release. This would throw Ceapro’s financing efforts into turmoil.
The release also said SGGF had advised the company it had a memorandum of understanding with Can-Oat Milling.
Bill Hunt, of Saskatchewan Wheat Pool, which owns Can-Oat Milling, said the nature of the memorandum is not public, but said it is obvious the Canamino plant is a natural customer for Can-Oat’s new oat groat plant in Saskatoon.
