An estimated 80 people heard that the almost 100-year-old Producers Grain Co. has $6.7 million in assets and $7.6 million in debt and that everyone who has done at least $1,000 in business with the member-owned cooperative during the past year will be eligible to vote on the MFA takeover at Producers' annual meeting at 6 p.m. Jan. 29 at the Eagles Lodge in El Dorado Springs.
A Producers spokesman had said before the meeting that the company has 42 employees in Nevada and the three other cities. Approval by 75 percent of the Jan. 29 voters will be necessary to effect the changeover.
Backed by Long, Brackenridge said MFA would ensure that there was no lapse in service and he said that whether or not the deal is approved, MFA has already accepted all the 2012 pre-pays made by Producers patrons, or customers, and is guaranteeing the delivery of their fertilizers, chemicals, seed and other pre-paid supplies this year.
Brackenridge said MFA has also agreed to invest $400,000 to $500,000 annually to modernize Producers' operations.
"It has been a struggle since the '90s. Our debt has exceeded our assets and our loans are in default with the banks."
Brackenridge said the panel had hoped conditions would improve because the cooperative bounced back from a $700,000 deficit in 2009 to $355,000 in red ink the next year and that it broke even in 2011.
As he had in El Dorado Springs, former Producers member Jim Wilson of Richards questioned the takeover plan by saying other buyers should be sought so that a better offer would enable the return of $2.4 million in equity that the members will otherwise lose.
Noting he spent $400,000 with the company in 2010, Wilson said it makes good business sense for MFA, which is currently owed $5.5 million by Producers, to cover that potential loss with an expenditure that would in effect be only $900,000.
Westbrooke said MFA would then have to keep running Producers at a loss, which it has done since August, and stay in the running while the process was lengthened. The accountant said that if another buyer were not found, Producers' assets might have to be sold at a public auction and its services interrupted for an indefinite period.
A Q&A sheet handed out during the meeting said "about the same number of employees as are currently employed" would be retained and that the company would be renamed Producers MFA Agri-Services.
The sheet said the equity issue "is being investigated to see if your equity can be deducted as a loss on your Schedule F (tax return) next year."
It said the transfer of assets will take place within 60 days after the end of this month if the transaction is approved.