Eastern Meat Solutions, CCAA

Eastern Meat Solutions, a diversified, Mississauga, Ontario-based group of companies, obtained protection under the CCAA on May 21.

The group operates three distinct businesses: i) a meat trading business; ii) a food processing business (Sierra Foods); and iii) a cold storage and transportation business (Sierra Services).

Despite top line revenue of approximately $281.0 million, much of the group’s business is low margin, and recent increases in the cost of capital, coupled with inflationary pressures and escalating supply costs, have created significant liquidity issues for the group and pushed it offside on certain of it debt service covenants.

While under creditor protection, the group intends to wind down its meat trading business, market and sell its processing business on a going concern basis, and focus on restructuring and continuing its cold storage business.

BMO, the company’s senior secured lender, will provide DIP financing to support the restructuring.

Deloitte is the monitor.

Counsel is TGF for the group, Dentons for the monitor and BLG for BMO.

By: Dina Milivojevic