NS: Possible sale imminent for former pharmaceuticals plant

[NORTH SYDNEY, NS] — A decision is expected soon on the proposed sale of the former Keata Pharma plant, located in the Northside Business Park, to an Australian company. The matter is before the Ontario superior court.

A. Farber & Partners Inc. of Toronto, the interim receiver handling the marketing and sale of the Keata Pharma assets and businesses, has been working with Enterprise Cape Breton Corporation (ECBC) and other secured creditors in an effort to sell the plant.

The former Keata plant in the Northside Industrial Park could soon have a new owner. The plant has been sitting idle since May 2008. — Julie Collins, Cape Breton Post photo

In a report to the Ontario court dated February 18, Farber states that Labki Finance Inc. and ECBC, the only secured creditors that appear to have an economic interest in the facility, consent to the proposed sale.

The receiver is applying for court approval to conclude the transaction on the basis of what it calls the highest and best offer received out of an initial sales process run by Farber and a follow-on sales process run by ECBC.

ECBC has security over the North Sydney facility and is owed about $4.4 million plus interest and costs.

It is expected the purchaser will pay $3.6 million for the property, which includes inventory and equipment located at the North Sydney facility.

ECBC had provided $6.5 million in loans and equity for its $15-million plant, with the promise of creating at least 65 jobs. The plan later expanded to at least 150 workers within the first three years of operation.

Keata Pharma had operated the pharmaceutical manufacturing plant in the Northside Business Park since November 2007. Parent company PharmEng International Inc. announced the closure of its Northside plant on May 8, 2009.

The secure creditors won’t get all their money back, but the sale could preserve jobs.