A
Anonymous
Guest
Province balks at further funding for Ranchers Choice 12.21.2006
By Dave Bedard
The troubled Ranchers Choice Beef Co-op project at Dauphin faces what some have warned could be its death-blow after the provincial government today officially declined to increase its financial exposure to the slaughter plant proposal.
Ag Minister Rosann Wowchuk told reporters on a conference call that
members of the co-op board had provided her with a term sheet from a
private investor willing to provide further financing to the project, contingent on the province's willingness to act as a guarantor and further investor.
"We looked at that term sheet and it was one we could not and can not endorse," Wowchuk said.
The Co-operator reported December 21 that the province had received a request to underwrite at least part of a $40 million financing arrangement between Ranchers Choice and an unnamed private investor.
The province has so far committed about $11 million to Ranchers Choice in the form of both direct investments and loans, on top of a commitment from the provincially-backed Manitoba Cattle Enhancement Council using special check-off funds from beef sales.
But Ranchers Choice's lender, Wowchuk said, is looking for security on $17 million in private sector investment, plus $18.5 million in total provincial equity including its contributions to date, plus other financial commitments.
Wowchuk said the province's existing funding commitments are still on the table, but this deal would make the province the sole funding partner and "we don't want to be the owner of this facility."
Sources within the co-op have previously told the Co-operator that without this private-sector financing, the planned slaughter facility is probably dead in the water.
A group of Manitoba ranchers has spearheaded the Ranchers Choice co-op proposal for three years now, looking to provide the province with some federally inspected beef slaughter capacity to handle cull cows and other cattle. The concept was developed after the BSE crisis shut the door to the U.S. market for such animals.
Wowchuk, however, said the province's refusal does not shut the plan down "if producers recognize the value of (the proposal) and say (they're) prepared to commit a lot more cattle."
To operate the Ranchers Choice plant at full capacity, she said, it would need commitments of 80,000 cattle per year from producers -- and actual commitments to date only total 19,000 animals over two years, she said.
But Wowchuk also did not rule out further help for the project if private backers were to offer different terms. She said the co-op board will now make a decision on how to proceed.
Representatives from Ranchers Choice and the Rural Municipality of Dauphin were not immediately available for comment. Watch for more details in the January 4 issue of the Manitoba Co-operator.
---
By Dave Bedard
The troubled Ranchers Choice Beef Co-op project at Dauphin faces what some have warned could be its death-blow after the provincial government today officially declined to increase its financial exposure to the slaughter plant proposal.
Ag Minister Rosann Wowchuk told reporters on a conference call that
members of the co-op board had provided her with a term sheet from a
private investor willing to provide further financing to the project, contingent on the province's willingness to act as a guarantor and further investor.
"We looked at that term sheet and it was one we could not and can not endorse," Wowchuk said.
The Co-operator reported December 21 that the province had received a request to underwrite at least part of a $40 million financing arrangement between Ranchers Choice and an unnamed private investor.
The province has so far committed about $11 million to Ranchers Choice in the form of both direct investments and loans, on top of a commitment from the provincially-backed Manitoba Cattle Enhancement Council using special check-off funds from beef sales.
But Ranchers Choice's lender, Wowchuk said, is looking for security on $17 million in private sector investment, plus $18.5 million in total provincial equity including its contributions to date, plus other financial commitments.
Wowchuk said the province's existing funding commitments are still on the table, but this deal would make the province the sole funding partner and "we don't want to be the owner of this facility."
Sources within the co-op have previously told the Co-operator that without this private-sector financing, the planned slaughter facility is probably dead in the water.
A group of Manitoba ranchers has spearheaded the Ranchers Choice co-op proposal for three years now, looking to provide the province with some federally inspected beef slaughter capacity to handle cull cows and other cattle. The concept was developed after the BSE crisis shut the door to the U.S. market for such animals.
Wowchuk, however, said the province's refusal does not shut the plan down "if producers recognize the value of (the proposal) and say (they're) prepared to commit a lot more cattle."
To operate the Ranchers Choice plant at full capacity, she said, it would need commitments of 80,000 cattle per year from producers -- and actual commitments to date only total 19,000 animals over two years, she said.
But Wowchuk also did not rule out further help for the project if private backers were to offer different terms. She said the co-op board will now make a decision on how to proceed.
Representatives from Ranchers Choice and the Rural Municipality of Dauphin were not immediately available for comment. Watch for more details in the January 4 issue of the Manitoba Co-operator.
---