The president of Agristar Produce Inc. says his company continues to operate while under protection from its creditors, and will successfully negotiate a restructuring.
Frank Gatto said Jan. 26 the company had sought protection under the Companies’ Creditors Arrangement Act earlier this month after some creditors weren’t willing to wait while it reorganized on its own.
Agristar has been in business nearly 40 years and operates several potato and vegetable processing facilities in Alberta and Saskatchewan.
Gatto said the action was not due to the downturn in potato prices.
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“We let the pennies and nickels get out of hand,” he said. “The parties involved are gone. I’m back full-time.”
Gatto had stepped away from the company to work on a succession plan. He said he had to come back to clean up the mess left by the now-departed managers.
The province of Saskatchewan is among the company’s secured creditors. The company, then known as Pak-Wel Produce, purchased a large storage facility near Lucky Lake last year for $2.75 million.
Zach Douglas, vice-president of Investment Saskatchewan, said Agristar still owes $750,000 for the facility. He expected the province would receive at least some of the money.
“We understand that they are still operating at this time, washing and packing potatoes while they’re under protection from their creditors.”
In fact, Gatto said, the Lucky Lake facility turned a profit during the previous week and all locations are operating.
Gatto predicted the company would pull through. He couldn’t say when the restructuring would be complete, but said suppliers were co-operating.
“We require a plan to be in place,” he said. “I will not borrow myself out of difficulties. We have to sit down and look at this analytically and I have some excellent professional people helping me.”
No employees have been laid off.
Meanwhile, the province completed the sale of its storage shed at Tullis late last year. Island Holdings, part of the Cavendish Farms family of Prince Edward Island, purchased the shed for $900,000. Douglas said there are now either completed sales or agreements for sale on all the potato storage facilities built by the province in the mid to late 1990s.
