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Big Sky Farms Files for Creditor Protection

by 5m Editor
12 November 2009, at 2:22pm

CANADA - Big Sky Farms in Saskatchewan has applied for protection under the Companys' Creditors Arrangement Act (Canada) or CCAA.

Big Sky Farms Files for Creditor Protection Big Sky President and CEO, Casey Smit, said: "The protracted downturn in the North American pork market prompted the company to seek court approval for creditor protection.

"Big Sky has consistently ranked in the top percentile of North American producers; however, the extended downturn and a recent collapse in hog prices associated with the risk of an H1N1 flu pandemic, which has resulted in an abatement of consumer demand for pork products, coupled with the rising Canadian dollar and American trade barriers left us no other option.

"While we are very sorry about the financial impact these proceedings will have on our valued suppliers, feed producers and others; we are very thankful and appreciative of the continuing support of these same suppliers, our customers, lenders and our employees. While today's actions are difficult, they will, in the long term, serve the varied interests of our many stakeholders, including our dedicated employees, by making the company healthier overall; a stronger entity better able to accommodate future fluctuations in market conditions" Mr Smit added.

Big Sky Farms is Saskatchewan's largest hog producer, delivering more than 900,000 animals to North American markets annually.

The company operates approximately 40 units in Saskatchewan and Manitoba employing more than 400 people. Big Sky remains focused on hog production in a safe and responsible manner, consistent with the registration of all it hog production facilities under the high standards of the Canadian Pork Council's Canadian Quality Assurance Program.

"The company will continue normal operations while under the court-ordered protection. All employees will remain on the job and to be paid in the normal course, including continuation of their ordinary course benefits. In addition, we will continue to provide our customers with the highest quality of product; consistent with that delivered in the past," said Mr Smit.

The CCAA process provides a period of time for the company to continue to operate while restructuring its financial obligations. The process involves the appointment of a monitor who assists the company through the restructuring process.

"Over the coming days and weeks, we will work with the company's advisors and stakeholders on a plan to restructure the company's financial obligations. As we have done over the past two years, we will continue to look for ways to improve profitability through revenue generation and the realisation of operational efficiencies," said Mr Smit.

Part of the restructuring effort will entail re-aligning the company to access federal government support programmes, including a recently announced loan guarantee program designed to support the industry.

Mr Smit added: "We are confident today's measures will facilitate access to these important industry support programmes. We are confident about our future."