A Richmond company that grew ginseng in Ontario is dissolving, thanks to losses from low ginseng prices in Asia.
Chai-Na-Ta Corp. (OTCBB:CCCFF) has announced the resignation of the company’s board of directors and its plans to file a Form 17 application for dissolution under the Articles of Dissolution to Corporations Canada Act.
The company announced at the end of July that it would be distributing $10 million worth of shares. At 34,698,157 common shares outstanding, that works out to $0.29 per share. The company appointed Computershare Investor Services Inc. as its paying agent.
The company posted a net loss of $453,000 in the first half of 2012, compared with net earnings of $2.7 million for the same period in 2011.
“The ginseng prices are not that good and the cost of producing is so high that sometimes the selling price (does not) even cover the cost,” Chai-Na-Ta corporate secretary Wilman Wong told Business in Vancouver.
Chai-Na-Ta grew ginseng in Ontario and sold the root primarily in Hong Kong and China. All of the company's ginseng crops have been harvested and all of its inventory sold.
Ginseng is a slow-growing root, valued for its mineral content and medicinal properties. It is especially valued in Asia by traditional medicine practitioners.
