'The end is in sight' to get embattled Wabush mine out of creditor protection, says spokesperson
CBC
Tacora Resources has secured court approval to proceed with the sale of its mine, and one of companies that is part of the bid is a global conglomerate that had squashed a previous attempt to sell the mine.
Tacora said a statement on Thursday that a bid to buy the mine, led by Boston-based investment management firm Millstreet Capital Management, had been approved in an Ontario court.
Spokesperson Graham Letto said the company is aiming to close the deal by Aug. 30.
"The end is in sight. You know, it's been a tough year for us. It's been a hard slog and a lot of people have worked very, very diligently and very, very hard to get us to this point today," Letto told CBC News Friday morning.
As soon as that transaction is closed, he said Tacora will be able to exit creditor protection, which began 10 months ago.
Tacora, which owns the Scully Mine in Wabush in western Labrador, obtained creditor protection from Ontario's Superior Court in October.
In documents, it cited a volatile market, raging forest fires and unexpected maintenance at the mine as contributing factors that led to a dire year financially.
One of the new buyers is Cargill, a massive, privately owned U.S.-based global food corporation, which is already one of the companies that co-owns Tacora.
Earlier this year, Cargill objected in court to a previous investment bid for Tacora, alleging the process was being done too quickly and if the deal was approved it would financially hurt Cargill.
Letto said during court delays, that first group of investors — made up of private equity firm Resource Capital Fund VII LP and commodities traders Javelin Global Commodities — backed out.
As a result, he said Tacora reopened the bidding process in July and received one bid, put together by Mililstreet, Cargill and Minnesota-based investment firm O'Brien-Staley Partners.
Despite that, Letto said Tacora has a good reputation with Cargill.
"It shows that Cargill does have faith in this operation and they love the product that we produce. It's a world class product," he said.
CBC News asked Millstreet Capital Management, O'Brien-Staley Partners and Cargill for an interview but did not get a reply at the time of publication.
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