As reported on Wednesday, Monette Farms and its many affiliated companies have filed for creditor protection.
The court document filed at Court of King's Bench in Calgary provides insight into the size and scope of Monette's operations and the extent of their financial difficulties.
According to the court document, the Monette Group forms one of the largest private farming businesses in North America with operations in Alberta, Saskatchewan, Manitoba, B.C., and the states of Montana, Colorado and Arizona.
The group owns approximately 274,000 acres of land and leases approximately 218,000 acres. It also has seed processing and produce storage facilities.
The restructuring plan is debtor-in-possession financing, because the applicants are insolvent and don’t otherwise have the finances to seed a crop this spring.
Monette did recently sell some farmland, most notably about 13,000 acres near Stewart Valley, Saskatchewan for $54 million. Subsequent activity resulted in two more sales totalling nearly $31 million. However, the proceeds were not enough to continue operations.
The document says the group requires additional time to implement a controlled deleveraging and refinancing. The strategy includes the right-sizing of the business and balance sheet through an orderly disposition of assets.
Without debtor-in-possession financing, crop would not be seeded, the land would not generate income and would then drop in value.
In addition, about 600 seasonal employees would lose their jobs. It’s considered in the best interests of the lenders led by the Bank of Nova Scotia to supply the necessary additional financing.
