Canadian Manufacturing

Legumex Walker sells assets for $174.6M in liquidation

by The Canadian Press   

Canadian Manufacturing
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The company in March said a lender demanded full repayment of funds advanced under a credit agreement

WINNIPEG—Legumex Walker Inc. says it hopes to sell its main assets for C$174.6 million to a strategic partner and then wind up its operations through a court-approved liquidation.

The Winnipeg-based company had promoted itself as a growth-oriented processor of special crops such as sunflower seeds, flax and canary seed and as well as pulses, which include lentils, peas, beans and chickpeas.

Legumex said Sept. 14 that its special crops division is to be sold to The Scoular Company, which has agreed to pay C$94 million cash, plus working capital at the time that the deal closes, for a total of $174.6 million.

The two companies formed a strategic alliance in October 2014 that involved Scoular marketing all the canola meal and canola oil from a processing plant owned by Legumex’s Pacific Coast Canola subsidiary.


As part of that agreement, Scoular invested $16.5 million in Legumex through a convertible debenture, which could be exchanged for common shares at a rate of $6.75 each.

Scoular is a 123-year-old grain company with about $6 billion in annual sales. It has 130 independent business units and more than 850 employees involving in grain trading, handling and storage.

Legumex also has a more preliminary deal with an unidentified party to divest its 84 per cent stake in Pacific Coast Canola LLC, which has an oilseed processing plant in the State of Washington.

The proposals follow a strategic review launched by the Legumex board in March.

In August, the company announced that a lender had demanded full repayment of funds advanced under a credit agreement to Pacific Coast.

Legumex said that AgCountry Farm Credit Services has agreed to provide time for the PCC to be finalized but it doesn’t expect to receive any value from that deal.

If the transactions close as anticipated, Legumex Walker says it plans to wind up its business and distribute between $2.50 to $2.75 per share to its shareholders—after repayment of banking debt and other obligations.


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