AgWest eyes public sale path out of creditor protection

A Manitoba agricultural equipment retailer may soon be up for sale after landing in creditor protection.

AgWest Ltd.’s future is in flux. The Elie-based business, and two related numbered companies, entered creditor protection in Manitoba’s Court of King’s Bench last month.

A public sale is the most likely path forward, said Derrick Webster, AgWest’s chief executive. It’s up to the court, he added, noting the company could be “of interest” to others in the sector.

He expects a decision to come in the next 30 days. AgWest is being overseen by Alvarez & Marsal, a court-appointed monitor.

Orest Konowalchuk, the monitor’s representative, didn’t respond to interview requests by end of day Monday.

AgWest’s eight Manitoba and Saskatchewan branches remain open. None of the company’s 109 staff have been laid off, Webster said on Monday. “Our business is worth a lot more running than it is in selling off the assets.”

The Bank of Montreal has promised to lend up to $6 million as AgWest operates under extended protection, through to Jan. 29, 2027.

AgWest owed the bank $34.3 million as of Oct. 7, court documents show. Its overall secured debt obligations — including to Farm Credit Canada and equipment manufacturers — totalled $72.5 million.

AgWest got a default notice from the Bank of Montreal in May after surpassing its borrowing limits and breaching a financial covenant.

BMO demanded repayment on July 30; money wasn’t given. A cash flow forecast showed AgWest would run out of funds when payroll was due in coming days, an Oct. 4 affidavit from a Bank of Montreal employee says.

Court documents cite challenging market conditions, including low sales, and expansion-related impacts as the reasons AgWest’s financial performance “deteriorated materially” last year and into 2026.

Webster pointed to used agricultural equipment. Prices are dropping fast while new equipment costs inflate, he said. 

Producers often trade their old equipment for new and pay the difference.

“(It’s) causing a lot more cost per year for our client base,” Webster said. “That is creating a lot of reluctancy to purchase.”

Flooding in parts of Manitoba this summer and uncertainty with U.S. tariffs over the past two years has added to farmers’ hesitation, Webster added.

AgWest sold much of its used inventory in auctions last year. It lost more than 30 per cent of the value it paid for the equipment, costing the company millions of dollars, Webster said.

Meantime, manufacturers are “strongly encouraging” more new equipment sales, which is pricier for customers, he said.

Zweegers Equipment Group, a Dutch company, bought AgWest in 2023. At the same time, AgWest was expanding and changing its branch management structure.

It acquired two Saskatchewan dealerships and announced two new 20,000-square-foot facilities in Manitoba last year.

The expansion didn’t significantly change cash flow, Webster said.

AgWest and its board of directors agreed this year it needed direct involvement from a restructuring professional services firm, an Oct. 9 court document says.

Webster called the intervention “needed,” despite the uncertainty it brings employees.

“Our fixed cost structure — (it’s) very difficult, outside of a process like this, to reduce,” he said. “(This) is allowing us to restructure some of our fixed costs, building costs, long-term contracts.”

AgWest hopes to exit creditor protection with fixed costs “more in line with what a healthy operation would be,” Webster said.

Farm equipment rentals are being offered more this year as steel tariffs raise product prices. It’s a sign of new equipment “not moving,” said Stuart Smyth, a University of Saskatchewan agriculture professor.

Farm Credit Canada has tracked fewer equipment sales in 2025 and 2026.

Smyth called equipment retailers a “vital component of the ag sector.”

“Hopefully, there won’t be a significant amount of consolidation,” he said. “Competition is good for every industry.”

New AgWest ownership would likely be “well-received” in Elie, said Dan Bouchard, the community’s local urban district committee chair.

AgWest has operated in Elie for more than two decades. It employs locals, including mechanics, and draws customers from other areas, Bouchard noted.

“I expect they’ll come out of it OK,” he said of the business. “It would be a shame to lose them.”

Customers shouldn’t notice a difference in service, Webster said. Vendors are required, via a court order, to continue supplying AgWest through January.

Some companies didn’t know that last month; delays ensued until AgWest clarified, Webster said.

AgWest had roughly $75.8 million in assets and $73.7 million in liabilities as of Aug. 31. It’s known for selling Agco brands such as Massey Ferguson and Fendt, and Claas equipment.

gabrielle.piche@winnipegfreepress.com