The main creditor of beleaguered Canadian organic supermarket chain Planet Organic Health has signed a deal to take over all the retailer’s assets.
Under the agreement, subject to approval from Ontario’s Superior Court and the TSX Venture Echange, Toronto-based Catalyst Capital Group would acquire all of the Edmonton company’s assets in both Canada and the U.S.
That includes nine natural and organic food supermarkets in Edmonton, Calgary, the Toronto area, Halifax, Victoria and Port Coquitlam, B.C. under the Planet Organic Market brand, plus 11 more in New York state and Connecticut under the Mrs. Green’s Natural Markets banner.
All the outlets “will continue to operate in Canada and the U.S. without disruption to existing customers, employees or suppliers,” Planet Organic Health said in a release Friday.
Planet Organic will get “no cash consideration as a result of the sale of its assets,” which Catalyst will take over to cover indebtedness of over US$31.1 million.
Catalyst, a private equity investment firm, called in its financing to Planet Organic last month, sending the retailer into creditor protection expiring May 27. The company on Friday was granted an extension on that protection to June 18.
The two companies expect to close the acquisition deal by June 7 at the latest.
Planet Organic on Thursday was granted a court-approved postponement of its annual general meeting of shareholders, which was previously rescheduled from May 14 to Friday (May 21) in Calgary.
“Further details of the date of (the) annual general meeting will be announced in due course,” Planet Organic said Friday.
The company in March 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.