Thursday, February 19, 2009

"I'll Second That..." just a "money pit"...

I wouldn't necessarily call this a "Secret" report as it was more or less a NOFG business plan "Term Sheet" to raise money for working capital and to build a new plant elsewhere... brokers in Halifax and elsewhere were sending the report and term sheet off to people they thought might be potential investors... and I should know because I was sent an unsolicited "plan" and I also had an unsolicited call looking for "cash" to invest in this business... at the time I thought it was a pretty unusual as there was a lot of local talk that the "Company" was having some financial difficulties which was evidenced by the quick money Mr. Bagnall was throwing at them... and there was also some talk of building a new plant... what surprised me the most when looking over the "plan" was that locally there appeared to be a group of Island Hog Producers as the owners and they were "wearing their feelings on their sleeves" and we could all feel for them... yet when you read the report and in talking with the brokers there was little if any Island ownership, directors or management being played up in the business plan... it appeared clear these Quebec guys had a plan to grab the money and move the plant off Prince Edward Island and I'm pretty sure they weren't sharing that with the locals or Mr. Bagnall and his crowd.... the other surprising thing about the business plan was there was no owners "equity" or owner's cash invested in the plan and I suspect that is because the directors (outlined in the plan) hadn't put any money in the business themselves... as Mr. Bagnall had already did that with taxpayers' money and now there was none left to pay the executive salaries... and they weren't getting mine.... it was clear to me this crowd were "hoodwinking" the locals... I'm all for supporting local producers and local investment but this business in question "NOFG" was bleeding "cash" like a pig and the shareholders wouldn't, couldn't and hadn't put any of their own money into the operations.... they clearly couldn't raise it in the "public" marketplace and it appeared if they did they were hightailing it out of here anyway.... taxpayers’ should thank Premier Ghiz for putting an end to this "money pit"....
'Secret' NOFG report shows Quebec owners planned to invest elsewhere
The Guardian
Yet another ‘secret’ NOFG report surfaced at a public accounts committee meeting Wednesday as it continues its probe into the $4-million loss of provincial money in the Island’s former pork-processing plant.Several internal, ‘secret’ reports and addendums to reports have been trickling out of the hands of MLAs at public accounts for several weeks. This newest report, marked as a ‘confidential information memorandum’, contains the marketing and business strategy of the Quebec-owned Natural Organic Food Group Inc. (NOFG). It includes a plan by the Quebec owners to buy out the P.E.I. partners’ holdings in the company. It also discusses plans to build a new pork-processing plant — one that would not necessarily be built on P.E.I.MLA Charlie McGeoghegan, who brought this report forward Wednesday, said he views this information as “shocking.” “(The Quebec owners) didn’t put one penny into Garden Province Meats for NOFG in Charlottetown here on MacAleer Drive, not one penny for the $2.8 (million) in repairs for that,” McGeoghegan said during Wednesday’s public accounts meeting. “If anything, this report shows they were going to take the value-added process off of P.E.I.” P.E.I.’s former pork-processing plant was called into receivership in December 2007 when the province called in a loan the plant owners could not pay. It closed its doors permanently last March. The province’s auditor general investigated the plant’s finances and operations and found the plant was doomed from the start when the Quebec-owned NOFG, partnered with P.E.I. Pork Plus, took over the Garden Province Meats plant, formerly owned and operated by Maple Leaf. In his audit of the NOFG plant, Auditor General Colin Younker is highly critical of the millions in loans advanced to the company by government, despite $2.8 million in repairs that was needed but never supplied by NOFG.Without this capital financing, the plant bled money until it was finally called into receivership. But this newly acquired report, dated November 2007, shows the Quebec owners of NOFG were in the process of raising as much as $10 million — but not for the capital expenses required for their P.E.I. plant. They were planning to build a new pork-processing plant. “Construction is planned to start in early 2008 for completion towards the end of the year,” the report states. “The location for this facility will either be in the Canadian Maritime provinces or in Quebec.” This implies the proposed new plant would not have been built on P.E.I., McGeoghegan said. “There’s a lot of big questions about what they had planned, raising all this money and their intentions were not even for P.E.I.”Committee member and MLA Janice Sherry was highly critical of the Quebec owners exploring alternative plans while the previous government continually propped up P.E.I.’s plant with taxpayers’ money. “They walked off with how many hundreds of thousands of dollars of taxpayers’ money,” Sherry said, referring to almost $1 million paid out to the Quebec owners in salaries, bonuses, consulting fees and travel expenses. “These business owners from Quebec were obviously having a great time taking money out of the (P.E.I.) company with really no consideration of the hog industry on Prince Edward Island.” Public accounts has finished looking at the auditor general’s report on the plant but plans to continue investigating NOFG. The committee has called former agriculture minister Jim Bagnall, former provincial treasurer Mitch Murphy, who was in charge of the P.E.I. Lending Agency, as well as former development minister Mike Currie, to testify about key decisions in the province forwarding millions in unsecured loans to the company.

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