Top Bidder Pays $5.36M for NC Assets of Chicken Processor22 July 2013
US - A group led by a California auction company cast the winning bid in a bankruptcy auction for the North Carolina assets of chicken processor Townsend.
Newsobserver.com reports that San Francisco-based Rabin Worldwide led a group that made a high bid of $5.36 million at an auction last week. Rabin expects to close on the property, which includes plants in Pittsboro, Siler City and Mocksville, within the next few weeks.
The sale will bring an end to Ukrainian billionaire Oleg Bakhmatyuk’s disastrous attempt to enter the US poultry industry. Mr Bakhmatyuk, the majority owner of Ukraine’s largest egg producer, spent more than $35 million acquiring and upgrading the facilities before abruptly shutting them down for good in mid-2011.
Omtron USA, the company Mr Bakhmatyuk used to buy the Townsend assets, itself filed for Mr Bankruptcy late last year, which led to this week’s auction. Before the Mr Bankruptcy filing, about 130 North Carolina chicken farmers sued Omtron for breach of contract in state and federal court.
Rabin plans to sell off the various assets over the next few months, said Michael Bank, a senior vice president with the company.
He said Rabin has reached an agreement to sell about 80 per cent of the equipment in the Siler City plant to Ozark Mountain Poultry, which will use it in its facility in Arkansas. Omtron spent $8 million installing new equipment in the Siler City facility before shutting it down.
Rabin will then try to find a buyer for both the Siler City plant and an adjacent office building, Mr Bank said.
The equipment in the Pittsboro plant will be auctioned off, and Rabin’s group has entered into an agreement to sell 534 acres of land on which the plant sits to Cary-based Preston Development. Preston is accumulating land for Chatham Park, a massive new business and residential park it is planning in Pittsboro.
Mr Bank said Rabin hopes to find a buyer for the entire Mocksville facility, including the remaining equipment. Also up for sale will be two feed mills and a truck repair depot. Rabin has scheduled an auction for the first week of October to divest itself of anything it hasn’t found buyers for.
Omtron had earlier sold one of its hatcheries in Chatham County to Mountaire Farms.
Mr Bank said Rabin’s group was the only bidder for all the Omtron assets.
"Unfortunately that industry has been consolidating," he said of the poultry business, which has struggled to remain profitable in recent years as overproduction and rising feed prices eroded profit margins. "There’s just not as many processors."
Delaware-based Townsend filed for Mr Bankruptcy in December 2010 after more than 100 years in business. Omtron acquired the North Carolina assets for $24.9 million a few months later, and had grand plans to import cheap grain from the Ukraine and ramp up exports to markets in the Middle East, Ukraine, Russia and China.
But the plan quickly fell apart, undone by rising fuel and feed prices and problems Omtron encountered in trying both to import grain to the US and gain access to certain export markets. Omtron was soon losing $7 million to $8 million a month before the business was shut down, Mr Bakhmatyuk told the Kyiv Post in November 2011.
The closings have been devastating for towns such as Siler City, where the plant was both a major employer and one of the largest water users and taxpayers.
After being told of Rabin’s plans for the Siler City plant, John Grimes, the city’s mayor pro tem, acknowledged that repurposing the facility to fit the needs of another industrial user would be difficult.
"I just don’t know what it would be," he said.
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