Big Sky Farm Closes $66.5 Million Financing

On November 22, 2000, Big Sky Farms Inc. (Big Sky), one of North America’s largest hog producers, successfully closed a $66.5 million financing transaction with The Bank of Nova Scotia, who acted as agent for a syndicate of senior lenders, to refinance certain long-term debt and to establish new credit facilities to permit the construction of two new hog production facilities in the Province of Saskatchewan. Closing with respect to the new senior credit facilities was preceded by an equity financing in which Big Sky issued $23 million in Preferred Shares on a private placement basis to a syndicate led by Crown Life Insurance Company and CIC Industrial Interests Inc., both of Regina, Saskatchewan.

The new production facilities, with a total cost of $60 million, will more than double Saskatchewan-based Big Sky’s production to over 400,000 market hogs annually. Eight-five per cent of this production is expected to be sold to Mitchell’s Gourmet Foods Inc. of Saskatoon, Saskatchewan, pursuant to a long-term supply agreement that was renegotiated in conjunction with the financing transactions. Extensive negotiations were also required with existing lenders and shareholders of Big Sky.

Paul Grant of McKercher McKercher & Whitmore’s Saskatoon office acted for Big Sky Farms Inc. on the financing. James Mathers and Stephen Redican of Borden Ladner Gervais LLP’s Toronto office and Doug Osborn of Robertson Stromberg’s Saskatoon office acted for The Bank of Nova Scotia and the senior lending syndicate. The Crown Life syndicate was represented by Stuart Wicijowski of McDougall Gauley’s Regina office, while James Kerby of MacPherson Leslie & Tyerman’s Saskatoon office represented Mitchell’s Gourmet Foods Inc.