There has yet to be a successful bid for Merit Functional Foods nine months after the plant protein company, with its processing plant in Winnipeg, Manitoba, entered receivership.
Merit’s receiver — PwC — filed a court update on Nov. 14 acknowledging the sales process launched in March had not resulted in any purchase agreement.
The company was able to sell its remaining inventory for $3.3 million and collect accounts receivable worth $571,000.
After receiving approval from the Manitoba Court of King’s Bench on November 23, Merit is using the inventory proceeds to pay off the remaining debt of around $4.16 million to its operating lender, CIBC.
The company also owed $95 million to its two main creditors — Export Development Canada (EDC) and Farm Credit Canada (FCC) — when it entered receivership on March 1.
Along with approving the payment to CIBC, the judge also agreed to keep a confidential supplementary update on Merit’s sales process sealed until the transaction is completed, as it contained prior bid information and other commercially-sensitive details.
Merit was founded in 2019 as a joint venture between Burcon NutraScience Corporation, a publicly-traded company that owns a patented protein extraction technology, and several food ingredient industry veterans. Bunge Limited also invested $30 million for a minority stake in the company in 2020.
A 94,000 square foot plant for extracting food-grade protein from peas and canola, which was projected to cost $150 million, was built on the northwest side of Winnipeg and commissioned in 2021.
Merit received at least $100 million in financing and funding from federal government-affiliated sources, including FCC, EDC, Protein Industries Canada, and Agriculture and Agri-Food Canada. The federal support for the company was highlighted in a June 2020 announcement by Prime Minister Justin Trudeau.