Actions and Commitments

Call to Action # 92: Business and Reconciliation (92)

Refinancing Clearwater loan worth millions in annual cash flow for Mi’kmaw owners

January 24, 2024

Premium Brands has agreed to refinance $100M of debt at lower interest rate of 4.2%

a statue of a lobster
The Membertou First Nation in Cape Breton led the Mi’kmaw portion of the purchase. Chief Terry Paul says the interest savings will improve benefits to First Nation partners. (Robert Short/CBC)

CBC Indigenous: Mi’kmaw First Nations that own half of Canadian seafood giant Clearwater will finally start seeing multi-million dollar cash flows from their investment thanks to a loan refinancing that slashes interest payments.

Their partner in the landmark deal — Premium Brands of Richmond, B.C. — lent a coalition of seven Mi’kmaw First Nations about $240 million to cover their equity purchase of Clearwater in 2020.

But the loan came with a hefty 10 per cent interest rate, according to the non-profit First Nations Financial Authority. Premium has agreed to refinance $100 million of that debt through the First Nations Financial Authority at its interest rate of 4.2 per cent, the authority said Tuesday.

Debt restructuring worth $3 million a year to Membertou

The Membertou First Nation in Cape Breton led the Mi’kmaw portion of the purchase. Chief Terry Paul said the interest savings will speed up benefits to First Nation partners.

“We were able to negotiate a $100-million buy-down of the … debt which in turn helps us get cash flow to the community from the company a lot sooner. So that cash flow is going through to all the seven coalition members,” Paul said at a news conference on Tuesday.

A man wearing glasses and a green sweater smiles
Membertou First Nation Chief Terry Paul says the interest savings will improve benefits to First Nation partners that own half of seafood producer Clearwater. (Paul Withers/CBC)

He said it’s worth about $3 million a year to Membertou.

Details of the refinancing were announced by Paul and Ernie Daniels, CEO of the First Nations Financial Authority, an independent Indigenous financial institution with headquarters in Westbank, B.C.

“What’s really key in this case is refinancing high interest rate debt to the financing rates that First Nations can get through working with the FNFA. It’s much lower than what bank prime loan would be or even any private financing,” Daniels said.

The authority was a key player in 2020, providing the Mi’kmaw coalition $250 million to buy control of Clearwater’s extensive Canadian shellfish licences, which include quotas for lobster, scallops and clams.

It was the single-largest investment in the seafood industry by any Indigenous group in Canada.

‘Equal economic interests in Clearwater’

But the authority said it did not have the financial clout to lend the First Nations the $240 million needed for the 50 per cent equity stake in Clearwater.

That has since changed.

On Tuesday, CEO Daniels said FNFA has raised $356 million, enabling it to assist 25 Indigenous communities including the Clearwater loan refinancing.

Premium Brands announced some details about the debt restructuring in late December 2023.

“This transaction represents a further step to achieving the long-term goal of Premium Brands and the Mi’kmaq Coalition having equal economic interests in Clearwater that was contemplated at the time of closing the Clearwater acquisition transaction in January 2021,” said George Paleologou, president and CEO of Premium Brands, in a news release.

The company did not respond when asked if it is willing to give up its 10 per cent interest rate on the remaining portion of the debt.

The Mi’kmaq Coalition is made up of Membertou, Miawpukek, Sipekne’katik, We’koqma’q, Potlotek, Pictou Landing and Paqtnkek First Nations in Nova Scotia and Newfoundland and Labrador. 



Paul Withers, Reporter

Paul Withers is an award-winning journalist whose career started in the 1970s as a cartoonist. He has been covering Nova Scotia politics for more than 20 years.