World News
Kenora Forest Products up for sale: parent company in bankruptcy proceedings
Kenora Forest Products is up for sale, after its parent company filed for bankruptcy in early December.The Kenora Forest Products mill is listed for sale. The current owner, Prendiville Industries, hopes a deal for the mill and property can be completed by April 2020. Kenora Forest Products is up for sale, after its parent company…
Kenora Forest Products is up for sale, after its parent company filed for bankruptcy in early December.
Kenora Forest Products is up for sale, after its parent company filed for bankruptcy in early December.
Prendiville Industries, based in Winnipeg, filed for bankruptcy on Dec. 5. The company shuttered its Kenora sawmill in September 2019, laying off more than 100 staff at that time.
In an affidavit from Maureen Prendiville, the president of Prendiville Industries, she wrote the goal is to have the northwestern Ontario mill property and its assets sold by April 2020. The hope is the mill will then restart under a different owner.
Prendiville Industries purchased the mill in 1994, along with adjacent land in the early 2000s. It operated for 14 years at full production, until it was curtailed in 2008. The mill was re-started in 2015, she wrote, and operated until September of 2019.
The company made significant investments in the operation, putting $22 million into the sawmill.
However, a fire in December 2017 destroyed two lumber drying kilns, which required an investment of $4.3 million to rebuild. The new kilns started operation in October of 2018, but lumber prices were low by that point, and have never quite recovered.
Prendiville Industries, she wrote, used the proceeds of its Prairie Division mill to support Kenora Forest Products.
Throughout its operations, the mill in Kenora employed up to 145 people, with its final layoff in September 2019 putting 113 people out of work. Nine people still remain on site, to help maintain assets, and also assist with moving already produced lumber to buyers. Those who were last laid off can expect their jobs to be permanently cut by March of 2020, according to court documents.
The company is up to date on its payments for employee wages, benefits and RRSP contributions, writes Prendiville, but, the company owes over $19 million to the Crown for timber charges, along with $53,000 to the City of Kenora for property taxes.
The company also has other debts, in the neighbourhood of $29 million, along with payments owing to WSIB. Other major debtors include CIBC, FedNor, and trucking and transportation companies.
The sawmill itself has a book value of nearly $40 million at the end of August 2019, Prendiville wrote, which includes about 46 hectares of land. About 40 percent of the land is currently used by the sawmill and for storage, while the remainder is vacant.
Kenora Forest Products had agreements with Domtar, as well as a number of area First Nations and First Nation operated forestry companies to bring saw logs to the mill.
Prendiville wrote the company lost $5.6M in 2018 before income tax, and as of Aug. 31, 2019, the company faced a net loss of $7.6M.
About the Author
Born and raised in Thunder Bay, Jeff is proud to work in his hometown, as well as throughout northwestern Ontario. Away from work, you can find him skiing (on water or snow), curling, out at the lake or flying.
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