WELLAND, Ont. — This southern Ontario city’s $50-million biodiesel plant — which was once heralded as the future of the clean fuel industry — has gone into receivership and will be sold to the highest bidder.
Court documents confirm Toronto-based KPMG has been appointed as the receiver for Great Lakes Biodiesel (GLB), along with associated companies Einer Canada and Bioversel Trading.
It’s the latest chapter in the rocky history of Great Lakes Biodiesel, which opened the production facility in Welland at the end of 2012 to convert canola and soybean oil into biodiesel.
Luxembourg-based investment company Heridge SARL launched the court case because it says it was only repaid half of a $20-million loan used to get GLB’s Welland plant off the ground.
Heridge has now submitted a bid to purchase all assets of GLB, including the Welland plant, which isn’t in operation but still employs 16 people.
The plant is being maintained so it can immediately go back into production once there’s a new owner.
“The plant itself, according to the folks I’ve spoken to across the industry, is state-of-the-art and is a very valuable asset,” Welland MP Malcolm Allen said.
According to court documents, GLB used the $20-million loan to build the Welland production facility in 2012 and to secure a commitment from the federal government for $65 million through Natural Resources Canada’s $1.5-billion ecoENERGY fund, designed to kick-start the country’s biofuel industry.
E-mails from Natural Resources Canada show the department terminated its $65-million ecoENERGY agreement in October 2013 because “GLB had failed to fully commission the biodiesel plant in accordance with the requisite time lines.”
The court documents show company officials appealed earlier this year and Natural Resources Canada reopened the talks with GLB, but suspended them again in July because of a criminal investigation of possible Customs Act violations involving Bioversel Trading.
Allen said he believes GLB might have been relying on the federal cash to make its business model work.
If no other qualified bids are received, Heridge will take over ownership.
A Heridge spokesman, who asked not to be identified, said the company wants to keep the plant running.