2011-11-28 at 15:14
Global Sticks looking to province for $2M bailout
Global Sticks CEO Reggie Nukovic says the company will be asking the province for more money, up to $2 million, in order to stay afloat.
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The future of Global Sticks may depend on how generous the province is feeling these days.
CEO Reggie Nukovic on Monday said the company needs a $2-million bailout over the next few months to stay afloat, nearly two weeks after temporarily shuttering the 84-employee ice cream stick operation when the money ran out.
The province has already committed $5.85 million to Global Sticks, a number that rises to about $7 million when money given to partner organizations is factored in.
Nukovic, who takes full blame for not securing a consistent supply of birch wood, leading to missed payrolls and ultimately the possible permanent shutdown of the $12-million Oliver-Paipoonge facility, said he’s holding out hope they can overcome the obstacles and have the facility up-and-running before Christmas.
Employees, who were finally paid last week after the company missed payroll, were told of the closure on Nov. 15, a move Nukovic said would allow the company to restructure and refinance.
Shareholders plan to meet with local stakeholders, including creditors who have outstanding invoices, to work through the company’s financial struggles.
“We have a plan in place and it’s going to take a few more days, but we hope to get it out and workable. But we do need the support of all the stakeholders, obviously the stakeholders being the provincial government – and the Ministry of Natural Resource and the Northern Ontario Heritage Fund Corporation,” Nukovic said.
“We’re going to see the two mayors from Oliver-Paipoonge and Thunder Bay today. We need the support of everyone. It’s been a great breath of fresh air from our contractors and suppliers. We have some outstanding payments to them, but everyone has kind of sent their kind regards and said we’re here to support you guys and get you back on your two feet.”
Requests for comment from Oliver Paipoonge Mayor Lucy Kloosterhuis, Thunder Bay Mayor Keith Hobbs and Minister of Natural Resource Michael Gravelle were not immediately responded to on Monday.
About 10 employees, six in the boiler room and four in administration, remain on the payroll.
There’s still the matter of wood supply.
Nukovic said the company made errors when applying for wood allocation from the province, most notably not including enough Aboriginal content in the application, one of the main reasons Global Sticks was denied.
They’re still looking for a local supplier for the three to four truckloads of birch they need each day to keep the plant operational. Nukovic said most harvesters look at the species as throwaway material, but Global Sticks is willing to pay between $60 and $65 a cubic metre to secure a steady supply.
Meanwhile on Monday, NDP Leader Andrea Horwath took the Ontario government to task over provincial money given to Global Sticks, demanding Economic Development and Innovation Minister Brad Duguid provide an explanation. Duguid responded by saying not all companies Ontario invests in succeed.
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