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The Wingham Advance-Times, 1984-10-17, Page 5Page 4 -The Wingham Advance -Times, Oct. 17, 1984 ebt of $75 CO be ins re - United Co-operatives, of Ontario, (UCO) has ah< nounced that it has filed with the Supreme Court of On- o tario, a Plan of Arrangement which is the first step - towards a . complete re- organization of its financial affairs. UCO, the largest agricul- tural co-operative in 'On- tario, has been under financial pressure since January when approximate- ly $75 million of debt fell due and could not be re -financed. Major creditors include the Canadian Imperial Bank of Commerce ($40 million), Canadian Co-operative Credit Society ($30 million) and Barclays Bank Canada ($5 million). In addition, UCO is indebted to its members and others by way Of unsecured debentures ($24 million) and to a consortium of institutional lenders by way of first mortgage bonds on its Windsor Grain Ter- minal ($10 millioh). On Aug. 27, UCO filed for protection under the Com- panies Creditors Arrange- ment Act which is federal "C'MON, LET'S SEE WHAT THIS OLD HEAP WILL DO." What it may "do" is put yon ina wheelchair for life. Drive with care. CANADIAN PARAPLEGIC ASSOCIATION legislation permitting a debtor company with funded debt to obtain a stay of pro- ceedings against it while a Plan of Arrangement is being prepared ' and filed. The Co-operative was given until Sept. 30, to file such a plan with the court. Interim Receiver In granting UCO pro- tection under the Act, Justice Houlden of the Supreme Court of Ontario also appointed Price Water- house Limited of Toronto as interim receiver and admin- istrator to have general sup- ervision over the prepara- tion and implementation of the Plan of Arrangement. In the, material fed with the Court, Price Waterhouse terhouse has concurred with the Plan of Arrangement. The Plan of Arrangement filed provides that unsecured members' debentures aggre- gating over $23 million will be converted into secured term debentures of UCO, the institutional lenders with claims aggregating $76.5 million will receive secured income debentures and trade creditors as of Aug. 27, whose claims aggregate approximately $35 million will be paid in full within 90 days of court approval or such longer period as the court may allow. The in- stitutional lenders will have the option of converting up to 20 per cent of their claim into preference shares of the Co- operative with the right to elect, as a .class, a specified number of directors. The Windsor Grain Ter- minal Bondholders will continue with their existing security and receive ad- ditional collateral in return for making modifications to their existing security or al- ternatively converting their entire claim into secured income debentures. The Governments of Canada and Ontario have each agreed to make avail- able to UCO $7.5 million upon satisfaction of certain con- ditions, principally the adoption and implemen- tation by UCO of a compre- hensive business plan. Meetings of each class of creditors will be called by the interim receiver and ad- ministrator and hell during the period Nov. 29-30, for the purpose of considering the Plan of Arrangement. If approved by a majority in number representing three-fourths in value of the creditors of each class present in perspn or represented by proxy at the meeting, the Plan will be submitted to the court for approval. UCO must then obtain a favorable income tax ruling in respect of the income debentures and the par- ticipation of the Govern- ments of Canada and On- tario. UCO expects to fulfill all necessary conditions and obtain all required ap- provals. In material filed earlier with the Court, Albert C. Plant, Chief Executive Officer of UCO, stated that UCO's revenues exceed $500 million per year and its assets. are over $1.65 million UCO employs approximatioiy 1,.300 persons in its. 98 tete locations througbogt. On- tario, in 5 central feed plants across Ontario, at the On- tario Stock Yards at Toronto, in its grain terminal at Windsor, Ontario and at its head office and distribution centre in Mississauga. The Co-operative has . ap- proximately 49,000 direct members and 39,000 indirect members through its 46 member co-operatives. Special Act UCO was incorporated by special act of the Ontario Legislature in 1948 although its origins go back to the early 1900's. It was sub- sequently continued under the Co-operative Corpor- ations Act of Ontario and itis presently governed, by that Act. The Government of On- tario and the Government of Canadahave indicated their willingness to give financial and other support to UCO ation provided certain conditions.. are nxet. UCO expects to meet those conditions as part. of its current restructuring. The•.Co-operative reported its firstoperating loss in 1981, losses continued in 1982 and 1983 with the result that almost $20 million of reserves were wiped out. These losses were caused primarily by a major ex- pansion during the 1970's, financed almost entirely by short-term interest-sensitive borrowings. When interest rates skyrocketted in 1980 debt service costs became unbearable. Although the Co- operative has substantially reduced its operating losses by cutting costs and dispos- ing of non -revenue-pro- ducing assets, it cannot repay its debts (over $140 million) without restructur- ing. Garth MacGirr, President of Price Waterhouse Limited, had indicated that, on the whole, operations }ti have run smoothly since Aug,t27. All wages have been paid and current suppliers are being paid according to their credit terms. Farmers delivering grain and live- stock to the Co-operative are being protected. Mr. MacQirr emphasized that, notwithstanding the "freeze" on pre -Aug. 27, 1984 claims, all farm producers have been paid in full. "We cannot permit our basic producers to go out of business" he said. Price Waterhouse will continue to supervise the financial operations of - the Co- operative until the Plan of Arrangement has been implemented. Approximately two-thirds of the Co-operative's customers are its own members and Mr. Plant is optimistic that their strong support will be continued. "After all, they are only helping themselves" Mr. Plant said. I SAW IT AD ADVERTISED ON TELEVISION BUT I DON'T ALL THE PRICE OR SIZ,E.OR COLORS OR EVEN WHERE IT WAS ON SALE 0 1 moo On the other hand.. . Newspaper Advertising leaves a LASTING IMPRESSION! 4DAYS.ONLY October 17th-18th-19th-20Th are cirzenZ to01 So let"s . acknowledge the outstanding young citizens of Ontario, through the 8icentenniol Year "Junior Citizen of the Year" awards program. Young people aged 6 to 18 who have proven their courage, ingenuity, resourcefulness, initiative, leadership, fortitude, community service and selfless performance are eligible for nominations. We're not looking for the "super -heroes" -- all- round, good kids are good citizens too. this year the 24 top-ranking nominees will receive o CP Air ticket, good for any Conadian destination. Twelve of the recipients will attend the Ontario Community Newspapers Association convention in Toronto and a reception with the Lieutenant Governor. Submit your nomination now. The final deadline for 1984 nominations is October 31. Nomination forms are available through this newspaper. Contact: Barry Wenger The Advance -Times 357-2320 ...or call 1•8OO-260.519341 to have a nomination form mailed to you. 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