FPI reaches tentative deal to sell plants

St. John's-based Fishery Products International has reached a tentative agreement on selling its assets, with disgruntled employees cancelling their picket plans.

FPI, which had beenthe target of a strike Monday by fish processing employees, put up its major assets on the block last year. It has been in serious negotiations with several parties since January.

In a brief statement Monday, FPI said it had signed a non-binding agreement with St. John's-based Ocean Choice on Sunday forsome of its assets and had also signed a similar letter with Nova Scotia seafood producer High Liner.

The company, however, cautioned that "there is no certainty that these discussions will result ultimately in the completion of any business transactions."

The statement did not comment further, but High Liner wants to purchase FPI's lucrative secondary processing plant in the southern Newfoundland town of Burin.

Ocean Choice wants to purchase five plants and another facility in six other communities, as well as trawlers and other assets.

Employees at the Bonavista plant decided Monday morning to return to work, even at the wage cutthat Fish, Food and Allied Workers union members narrowly rejected last week.

Employees say they are willing to return to work as the transition of assets is managed.

FFAW president Earle McCurdysaid Sunday he is relieved to hear the news of the sale, which has been in negotiations for months.

"There have been a lot of bridges burned with the previous regime," McCurdy told CBC News on Sunday.

"We'll do the best we can to get off to a good foot with the new crowd. We hope to meet with them in the very near future to get a handle on what their plans are and to try and move forward."

About 1,700 plant workers had moved into a legal strike position on Monday, following last week's rejection of an 11th-hour settlement reached between FPI and FFAW negotiations.

The pending deal appears to be enough to keep picket signs down.

"They're saying they're going to give the new company a chance," CBC reporter David Zelcer said Monday morning.

"They said it doesn't make sense to start out with the new company on the picket line."

In Burin, where FPI's secondary processing plant operates for most of the year, workers have also agreed not to picket.

On Sunday, McCurdy said he did not know how the sales agreements might affect the strike mandate.

"There's no textbook written on that, as to what you do with that," he said.

"It's a new situation in my experience, in 30 years, so we'll have… to sit down with our members and go through it with them."

Multi-year plan needed: Rideout

Fisheries Minister Tom Rideout said now that a tentative agreement has been reached, the province will want to see a multi-year operational plan that addresses issues including employment.

Under the FPI Act, provincial legislation that governs the former Crown corporation, the Newfoundland and Labrador government retains the right of approval over the sale of assets.

FPI had been seeking buyers for its major assets for months, and in March indicated that its preferred suitor was Corner Brook's Barry Group, controlled by businessman Bill Barry.

Instead, the Newfoundland and Labrador government directed FPI to negotiate with Ocean Choice instead, on grounds that its bid was better for the interests of the province's communities.

Ocean Choice is poised to buy facilities in Bonavista, Marystown, Triton, Port au Choix, Port Union and Dildo, as well as the company's trawlers.

Risley led a hostile takeover of FPI, one of the world's largest seafood companies and a major employer in rural Newfoundland, in 2001.

However, the company has been rocked by turbulence since.

Union members havecomplained that management promises of upgrades and reinvestments were not fulfilled, while the company has said successive fiscal losses have been due to high operating costs, unfavourable currency exchange and competition from cheap foreign labour.