September 14, 2015 / 5:34 PM / 2 years ago

Legumex to sell crop processing plants, wind down company

WINNIPEG, Manitoba, Sept 14 (Reuters) - Canada's Legumex Walker Inc said on Monday that it had agreed to sell its legume crop processing plants and expects to sell its U.S. canola-crushing facility, allowing it to wind down the company.

Winnipeg-based Legumex plans to sell its special crops division, which includes 14 plants in Canada, the United States and China, to private U.S. grain-marketing company Scoular for C$94 million ($70.89 million). Including Legumex's working capital, the deal is valued at C$174.6 million.

Legumex also said it is negotiating the sale of its 84 percent interest in Pacific Coast Canola (PCC), a crushing plant in Washington state. Glencore PLC owns the rest.

Legumex shares soared 140 percent to C$2.16 in Toronto.

In July, Legumex said PCC had defaulted on a $54.6 million loan. The company was hampered in 2014 by railway congestion limiting delivery of canola seed, and more recently weak industry margins and plunging crude and soyoil prices.

"It's really been difficult and that's why all the independent canola crushers have sold," said Legumex Chief Executive Joel Horn, in an interview. "None of the independents were able to survive pretty amazing macroeconomic events."

Two other canola crushing plants, Felda's TRT-ETGO facility in Quebec and PICO Holdings Inc's Northstar plant in Minnesota, were sold this year to Glencore's agriculture segment Viterra Inc and CHS Inc respectively.

Potential buyers for Legumex's canola plant are Glencore and U.S.-based oilseeds crusher Archer Daniels Midland Co, said Cormark analyst Marc Robinson, in a note.

Those are "two good guesses," Horn said, but declined to identify the company Legumex is talking with.

Canola is crushed to produce vegetable oil, which is used in cooking, and meal, used to feed livestock. Legume, or pulse, crops are foods rich in protein.

Once the processing plants are sold, Legumex will wind down operations and expects to pay its investors C$2.50 to C$2.75 per share. It will then cease trading on the Toronto Stock Exchange.

Scoular Chief Operating Officer Bob Ludington said in a statement that the acquisitions will expand its U.S.-based grain-handling network, allowing it to sell to more crop buyers globally.

The deal requires approval by Legumex's shareholders at a special meeting on Nov. 9.

$1 = 1.3260 Canadian dollars Editing by Grant McCool

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