Pulse company in financial jeopardy, blames export issues

A pulse company with operations all over Saskatchewan has gone into creditor protection and is blaming its struggles on export problems.

ILTA Grain Inc., was granted creditor protection by a B.C. court on Monday. The company is headquartered in Surrey, but has six facilities in Saskatchewan, with two in North Battleford and one each in Saskatoon, Belle Plaine, Swift Current and Cut Knife.

In its court filing, the company said its principle outstanding indebtedness on a consolidated basis is $149.5 million. It explained that over the past few months it has been trying to restructure things, but at this point, it doesn’t have the money to operate normally or meet its obligations.

ILTA describes itself as one of the two largest independent processors of quality grains in Canada. It sources, processes and exports pulses, grains, oilseeds and other specialty products.

The company is pointing to international trade conditions for its problems.

“Over the past few years, ILTA has faced increasingly challenging international trade conditions, which has caused a reduction in its revenues and, in turn, limited its ability to repay and service its debt load,” read the court documents.

It used India, China and Saudi Arabia as examples of countries that were significant markets for ILTA’s exports, but have limited or ended imports from Canada. ILTA said this has significantly affected its business model and profitability.

According to numbers from the provincial government, exports of pulses from Saskatchewan were down by 28 per cent in 2018, for a reduction of about $700 million. A government report points to 66 per cent tariffs imposed India in 2017 as part of the reason for the drop.

The company also talked about big expansion efforts and significant growth that it has made over the past few years as a factor. In 2012, ILTA bought four facilities in Saskatchewan and a news release from the time said the facilities will be expanded.

Over the past two years, the court filings said, the company has had net losses of $11.9 million.

ILTA said it has been trying to fix its problems, attempting restructuring in the past few months. This included laying off employees, reducing non-essential expenses and disposing of non-core assets. But the problems persisted.

The company has also started an informal sale process for the facility at Belle Plaine.

In the coming month, ILTA said it will seek financing and continue restructuring the company. Cost-cutting measures could include reducing operating costs, selling non-core assets and potentially laying off employees if required.

ILTA has 111 non-unionized employees — 95 in Saskatchewan, and 16 in B.C.

In court documents, the company said it intends to turn its informal sales efforts into a more formal sales and investment solicitation process.

In a letter to vendors and suppliers, the company said it remains in control of its property and business and is taking steps to make sure its vendors are paid in a full and on a timely basis for any goods or services provided going forward.

The creditor protection order lasts until Aug. 7, unless an extension is granted. According to ILTA’s monitor, ILTA will head back to court to seek interim financing and authorization to commence a sales process for its assets and operations on Friday.

Calls Wednesday to ILTA Grain Inc., seeking comment have yet to be returned.