A Saskatoon judge last week approved the sale of Stomp Pork Farms USA’s assets after its creditors forced the company into receivership.
Sources say that move triggered the parent company in Saskatchewan to start closing its operations.
According to documents filed on-line by court-appointed receiver Ernst and Young, the National Bank of Canada applied May 29 for an order to appoint the receiver.
Queen’s Bench judge Allisen Rothery approved that application and, four days later, also approved the sale of SPF USA and SPF Ltd. assets to G & D Pork, LLC of Sheldon, Iowa.
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G & D is an affiliate of Deluxe Feeds Inc.
The receiver’s first report, which contains the purchase price, is sealed until June 15 unless the court orders otherwise.
However, the second report outlines the business case for an immediate sale.
It noted that SPF USA is a Canadian company that buys isowean and feeder pigs from Stomp Pork Farm (2008) Ltd. and Titan Ventures Inc. The latter two companies were not included in the receivership order.
The company leased hog finishing facilities in the United States and had about 130,000 pigs in 47 barns in Iowa, two barns in South Dakota and one in Minnesota.
Ongoing significant losses and volatile markets convinced the receiver it could not continue to operate and two potential purchasers were contacted.
Only G & D submitted a bid in an acceptable range, said the report.
There are two secured creditors of SPF USA.
The National Bank of Canada is secured on the pig inventory as the main creditor, with an estimated $9 million outstanding. It initiated the receivership and supported the sale. Farm Credit Canada is also secured, but its main security is in Canada.
SPF USA’s estimated outstanding debt to creditors is about $10.7 million.
