AgWest: BMO's CCAA to carry a farm dealer to the next growing season

AgWest offers new and used farm machinery, parts, repair services and agricultural technology to farmers in Manitoba and Saskatchewan from eight branches, six in the first province and two in the second, and as at October 2, 2026 it employed approximately 109 people. Its unaudited consolidated balance sheet at August 31 carried total assets of $75,778,739.20 at book value, of which $59,651,278.46 was inventory and $66,773.50 was cash, per the Affidavit of Duc Nguyen, sworn Oct. 8, 2026, paras. 1–2, 8, 15–16. The affidavit that sets those figures out was sworn in Vancouver on October 8 by Duc Nguyen, a director of the Special Accounts Management Unit at Bank of Montreal, the dealer's lender.

The application under the CCAA is the bank's. Bank of Montreal, owed $34,294,463.42 at October 7 including accrued interest, asked the Court of King's Bench of Manitoba, Winnipeg Centre, to declare AgWest Ltd., 10159646 Manitoba Ltd. and their parent, 10159642 Manitoba Ltd., companies to which the CCAA applies, and says it settled on that course in consultation with the proposed monitor and with the companies' consent, per the Notice of Application, Oct. 8, 2026, paras. 1, 14 and the Affidavit of Duc Nguyen, sworn Oct. 8, 2026, para. 29. Justice Woolley granted the initial order on October 13, 2026, in File No. CI26-01-59339, with a stay to October 23 and Alvarez & Marsal Canada Inc. as monitor with enhanced powers, per the Initial Order, Oct. 13, 2026, paras. 10, 16–18.

A dealer bought in 2023

AgWest Ltd. in its current form dates from May 1, 2023, when it amalgamated with 10149099 Manitoba Ltd. Its parent, which gave the bank a limited recourse guarantee, is controlled by ZBG CAPITAL I B.V., which Mr. Nguyen understands and believes is funded by companies or individuals from the Netherlands, per the Affidavit of Duc Nguyen, sworn Oct. 8, 2026, paras. 3–5, 23. The bank's loan agreement bears the same date, May 1, 2023. It calls 10149099 Manitoba Ltd. "Acquisition Co" and 10159646 Manitoba Ltd. "Prop Co", and describes the "AgWest Acquisition" as the borrowers' acquisition of certain property and assets of the "Seller", Toromont Industries Ltd., "and of all of the issued and outstanding shares in the capital of AgWest from the Seller." One of its seven credit facilities, Facility 7, was "to finance existing and future purchases of New Equipment and Used Equipment, from various manufacturers and dealer trades," per the Affidavit of Duc Nguyen, sworn Oct. 8, 2026, para. 22 and Ex. "J", ss. 1, 6 and Sched. "A".

The account of why the business deteriorated comes from the proposed monitor's pre-filing report, which relies on the companies' unaudited financial information and discussions with management; no affidavit from the companies is in the record read for this piece. The report says performance "deteriorated materially during 2025 and into 2026", primarily because of conditions in the Canadian agricultural equipment sector: "Lower commodity prices, elevated input costs and higher interest rates reduced farm income and contributed to deferred equipment purchases, resulting in lower equipment sales over the past two years." Used equipment came under pressure on price and value, the report says, "as a result of increased discounting and auction activity by certain competitors in Western Canada." And in the report's account the acquisition by Zweegers Equipment Group in 2023 came while the companies were expanding into Saskatchewan, developing new branch locations and changing their branch management structure, initiatives that "placed additional capital and management demands on the business and contributed to operational and liquidity pressures," per the Pre-Filing Report of the Proposed Monitor, Oct. 9, 2026, paras. 7, 22–23.

Default, demand and a year of trying

On May 7, 2026, the bank's affidavit says, the bank gave notice of events of default, among them that on April 15 the companies had borrowings of $21,225,155.15 under Facility 7, $3,612,108.15 over its available limit of $17,613,047, and that they had breached the fixed charge coverage ratio covenant for the quarter ending December 31, 2025. At July 30, the affidavit says, those defaults were unremedied and the covenant had been breached again for the quarter ending March 31, 2026, and that day the bank demanded repayment of all indebtedness owing under the loan agreement and gave notice of its intention to enforce security under s. 244(1) of the BIA, per the Affidavit of Duc Nguyen, sworn Oct. 8, 2026, paras. 24–26. The demand was for $34,913,589.38, per the Notice of Application, Oct. 8, 2026, para. 8.

On or around August 14, according to the affidavit, representatives of ZBG CAPITAL I B.V. told the bank that its shareholders were reluctant to increase their exposure to the companies or provide further funding, and that it was advancing discussions with potential new equity providers. Talks on a forbearance arrangement followed the demand without resolution, the affidavit says, per the Affidavit of Duc Nguyen, sworn Oct. 8, 2026, paras. 27, 30.

The pre-filing report describes a longer effort. The companies, their counsel and advisers, "with the support of BMO and its legal counsel and financial advisors, have been attempting to restructure the AgWest Entities' affairs for nearly one year, without success to date," and the companies, their boards and the bank "all agree that the AgWest Entities now require the more direct involvement of a seasoned and well-respected restructuring professional services firm." In the same paragraph the proposed monitor says it understands that Derrick Webster, described there as a director and the chief executive officer, has agreed to remain a director until the amended and restated order is granted and then resign that role, and that it is not known whether the two remaining directors, located in the Netherlands and not actively involved in day-to-day operations, will also resign, per the Pre-Filing Report of the Proposed Monitor, Oct. 9, 2026, para. 28.

BMO's application brief says CCAA proceedings are usually commenced by the insolvent company, and that when the company does not initiate them, "a secured creditor typically applies under the CCAA for relief," per the Application Brief of the Applicant, Oct. 8, 2026, para. 33. The lender-led CCAA was surveyed here on July 22. Mr. Nguyen's affidavit is sworn in support of orders under the CCAA "or alternatively, for a receivership order," and makes the bank's interim lending conditional on CCAA protection "under the oversight of a monitor with enhanced powers," per the Affidavit of Duc Nguyen, sworn Oct. 8, 2026, paras. 33, 45.

Who is owed

The proposed monitor understands the companies' material secured debt to total approximately $72.5 million, owed to four creditors: BMO, approximately $34.3 million at October 7, secured by instruments including the parent's guarantee and pledge, a first-charge collateral mortgage over lands at Elie and Neepawa, Manitoba, and general security agreements; Farm Credit Canada, approximately $10.0 million at September 30, secured by a first-charge collateral mortgage over lands at Brandon and Russell; and, at the same date, AGCO Canada Ltd., approximately $20.8 million, and Claas of America Inc., approximately $7.4 million, secured by registrations against specific, serial-numbered AGCO and CLAAS equipment respectively, per the Pre-Filing Report of the Proposed Monitor, Oct. 9, 2026, para. 26.

The August 31 balance sheet shows consolidated liabilities of $73,734,325.07 at book value, among them a current portion of credit facilities of $31,946,681 and dealer financing payable of $31,713,747, per the Affidavit of Duc Nguyen, sworn Oct. 8, 2026, para. 17. The report cautions that the companies' net book values "may differ materially from their realizable value," per the Pre-Filing Report of the Proposed Monitor, Oct. 9, 2026, para. 25.