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Saskatchewan Wheat Pool seeks more time to restructure (Tuesday, Feb. 4, 2003 -- CropChoice news) -- CBC News, 01/31/03: REGINA-- A critical vote on the future of the cash-strapped Saskatchewan
Wheat Pool has been delayed until at least next week.
The Pool, a farmer co-operative that became a public company six years ago,
made the decision Friday to put off the vote on a restructuring plan.
The meeting was put over until Monday because the holders of $300 million
of the Pool's debt were ready to reject the plan, the company said.
The company wants them to convert their debt into another form of liability
that will give the Pool more financial breathing space.
The bankers, who are owed $105 million covered by the restructuring, had
already agreed to restructure the debt repayment.
The Wheat Pool employs more than 1,800 people in Saskatchewan. About 600 of
those are in the company's head office in Regina.
If the Pool goes into bankruptcy protection, those jobs could be on the
line, grain analyst Larry Weber told CBC News Morning.
But someone would probably buy the 79 elevators the Pool runs (down from
462 five years ago).
The Pool blames its problems on two Prairie droughts in a row. After 2001,
"the only serious impediment to our recovery would be a second consecutive
year of drought," CEO Mayo Schmidt told shareholders in November.
"As we all know, it happened again."
But the company had been weakened by a spending spree in the late 1990s,
financed with borrowings which left it vulnerable.
And it had lost support from farmers, who disliked the policy of closing
the local elevators.
Schmidt said it would be like "a tidal wave rolling across the Prairies" if
the Pool fails.
But wheat farmer Don Moats, who has no sympathy for the Pool, said "there's
lots of places to sell wheat."
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