Legumex to sell crop processing plants, wind down company

Mon Sep 14, 2015 1:32pm EDT
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By Rod Nickel

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.   Continued...