The lenders for Canadian organic food supermarket chain Planet Organic have called in their loans, leading the company to seek creditor protection.
The Edmonton company, which has shed most of its other businesses in recent months, is down to nine natural and organic food supermarkets in Alberta, Ontario, B.C. and Nova Scotia under the Planet Organic Market brand, plus 11 more in New York state and Connecticut under the Mrs. Green’s Natural Markets banner.
The company’s main lender, Toronto-based Catalyst Capital Group, on Wednesday handed in its demand for payment and notices of intention to enforce security on term loans and convertible notes, to cover indebtedness of over US$31.1 million, Planet Organic said in a release Friday.
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The Ontario Superior Court on Thursday granted Planet Organic 30 days of creditor protection, expiring May 27, and named Deloitte and Touche as the company’s court-appointed monitor.
The company noted its filing doesn’t affect its U.S. assets — namely, the Mrs. Green’s division.
Planet Organic said credit protection will give it “a defined process and the necessary time to restructure its affairs in order to emerge with a sustainable and profitable organic food retail business.”
The company said its organic retail business in Canada and the U.S. “remains profitable” and noted “strong opportunities to grow in a number of key segments.”
“Larger”
The goal of its restructuring plan, the company said, will be to make Planet Organic “larger and more profitable.” Meanwhile, its retail outlets will continue to operate in Canada and the U.S. “without disruption to existing customers or employees.”
Planet Organic also opted to postpone its annual general meeting of shareholders, which was to be held Friday (April 30) in Calgary and is now rescheduled to May 14.
The company last month sold off its supplement and vitamin division, Trophic Canada, to Quebec City-based Atrium Innovations for $10.6 million. It also shed six of its Healthy’s stores in southern Ontario to Good Health Mart for an undisclosed amount.
Planet Organic’s chain of Sangster’s Health Centre stores was sold off in February to an unnamed buyer for an undisclosed sum. In November 2009 it also closed a Planet Organic supermarket at Vaughn, northwest of Toronto.
