By Rod Nickel
WINNIPEG, Manitoba, Sept 14 (Reuters) - Canada's Legumex
Walker Inc LWP.TO 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 GLEN.L 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.
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"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 PICO.O Northstar plant in
Minnesota, were sold this year to Glencore's agriculture segment
Viterra Inc VILC.UL and CHS Inc CHSCP.O respectively.
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Potential buyers for Legumex's canola plant are Glencore and
U.S.-based oilseeds crusher Archer Daniels Midland Co ADM.N ,
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)