The organic food market chain that bills itself as Canada’s leading natural products retailer is considering selling off “non-core” assets to help pay down over $39 million in debt.
Planet Organic Health Corp., which runs 10 Planet Organic natural food supermarkets in Canada and 11 Mrs. Green’s Natural Markets stores in the U.S., said Wednesday it has hired an investment bank to evaluate the sale of “certain assets and/or its operations on a case-by-case basis.”
The Edmonton-based company is in credit default and still negotiating a forbearance agreement with its lenders but “has not yet come to terms,” it said.
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The company told shareholders it doesn’t yet have a timetable for any dispositions due to “continuing market weakness.” It also warned that Planet Organic’s lenders have the legal right to claim their security over the company’s assets at any time.
It may become necessary, the company said, for the company to look at “substantial divestitures” of its current operations so it can cover its debt payments and “continue operating as a going concern.”
The company’s other Canadian assets include 43 natural health outlets under the Sangster’s Health Centre banner and eight natural health outlets under the Healthy’s and Planet Organic Living banners. It also runs Trophic Canada, the country’s “leading manufacturer of natural supplements.”
The company’s board has also approved a possible future delisting from Toronto’s TSX Venture Exchange, in order to cut back on “administrative overhead.”
The company said Wednesday that its aggregate debt load now sits at $39.28 million.
If talks with the company’s lenders don’t lead to a refinancing agreement, Planet Organic said it will have to seek financing elsewhere to cover debt repayments if its current lenders demand them.
“Although credit markets appear to be strengthening, there is uncertainty whether sufficient funding would be available from current lenders or other parties,” the company said.
Planet Organic in May replaced its president and CEO Ron Francisco with a two-man “office of the CEO” including company director Brent Knudsen and chief financial officer Darren Krissie.
Krissie and Knudsen were named Wednesday as the company’s executive vice-president of business development and board chairman, respectively.
Francisco, who came to Planet Organic as Trophic Canada’s CEO, “has been released from all formal roles with the corporation but remains a member of the board of directors,” the company said Wednesday.
Yvan Boutin, the company’s director of finance, will now become its CFO, subject to acceptance from the TSX Venture Exchange.
