February 20, 2008

Future of Canadian hog plant remains foggy
 

The future of the hog plant in Charlottetown at Prince Edward Island (P.E.I.) remains uncertain with outstanding loans and low buyer interest.

The plant's former owners had handed over the keys to the province in January when they failed to secure any investors and to repay its loan. The province then appointed a receiver, which filed its first court report on Monday (February 18, 2008), showing the plant's financial state as of January 21, 2008.

The report shows that the plant owed a total of US$4.2 million. Farmers were owed US$925,715 for hogs, a debt guaranteed by the province, while US$2 million was owed to provincial taxpayers through loans that went unpaid.

The plant's listed assets include US$440,000 in cash, US$1.3 million in accounts receivable, and US$541,608 in brands.

There is also a disputable US$1.2 million listed as owed by the former owners.

Although the receiver is responsible to get an accurate picture of the plant's finances, but the process has been made difficult due to lack of cooperation from the plant's former management. The receiver is also having difficulty in finding a buyer for the plant, as interest is very low.

The plant will remain open for at least two more months while the buyer continues to search for a buyer. Meanwhile, keeping the hog plant open will cost P.E.I. taxpayers about US$19,697 per week, according to the report.