Sure. I'm happy to comment on all three things.
First, the writedown was composed primarily of mark-to-market. The Canadian dollar collapsed in October. It went from parity to about $1.30. We, as do most exporters in this country, carry futures contracts, FX contracts, on the currencies we are going to sell into to protect our prices and our margins. They go out from 12 to 18 months. We had booked futures contracts at what were considered to be good rates at the time. The dollar was basically at parity and we were at $1 to $1.04.
Unfortunately, once the dollar collapsed so dramatically, we incurred a large liability on those futures contracts--on several hundred million dollars of those futures contracts--of about 26¢. That kicked up about $40 million-odd, $48 million or $49 million, of the $102 million loss, which was totally unrelated to the core business of buying and selling seafood.
About $51 million to $60 million of that was tied to the collapse of the Icelandic banks you referred to. It's mark-to-market, non-cash, so it didn't cost the company any money. In fact, it simply is on the books because of accounting rules. We have legal advice that because of the bankruptcy of the Icelandic bank Glitnir, those moneys will never be realized either way. We'll actually have a non-cash profit show up in our financial statement at some future date in 2009 or 2010, but the operative word is “non-cash”. It has no value.
The $40 million-odd loss that was actually incurred in the foreign exchange is really an opportunity currency loss, because we're effectively selling a portion of our product at the old exchange rate as opposed to the prevailing exchange rate. That's what kicks up those losses.
As well, $8 million of the loss was created by the failed privatization. When the Glitnir Bank collapsed and the world markets collapsed, Glitnir was about 10% of the privatization financing. We lost that. We had it replaced several times, but the stock markets kept collapsing in the same week and through the month of October. As a consequence, all lenders got cold feet and backed away from the situation. We had to take some restructuring costs on our financial statement that normally would have been buried in the privatization.
In terms of the borrowing from Glitnir, from the Icelandic banks in lieu of Canadian banks lending to the industry, Glitnir and the Icelandic nation are very familiar with the seafood industry and have a great deal of faith in it, as do the Scandinavian nations, who are big lenders to the industry as well. Their demise removed a large source of funds for the industry. Many players were borrowers from the Icelandic banks. We've replaced, successfully, we believe, our term debt. We operate with about $16 million worth of cash on our books, so from a financial perspective, we're a healthy company.
My comments about the industry are not toward the consolidation of harvesting and processing, but are simply about creating the same level of control and protection for the processing side, or the buying side, that we do on the harvesting side. Right now, the buying side of the industry is a Klondike-like affair, in that anybody can do it. You can do it. I can go out and buy tomorrow. You don't need any particular structure to do it. I just need to rent a half-ton, one-ton, or two-ton truck, go out and pay the fishermen 25¢ more, driving the shore price up, show up one day a week or not, buy 10,000 or 20,000 pounds once, run it down to Boston, and make 50¢ a pound. I could make myself $5,000, $10,000, $15,000, or $20,000 on a load. It's nice easy money if you have no investment in the industry. That's part of the problem with the industry.
The other part of the problem that I try to get across is that we don't take care of the quality of the product, from the time it comes into the trap to when it gets to the marketplace. You're throwing away 15 million pounds of product, or 15% of the resource, because we beat it up; we don't treat it with respect. That's because you have a fishing effort that is very nearly comparable to a Klondike-type effort because there's no control. Everybody goes out and tries to grab as much of the pie as they can, as opposed to having a quota system, where they go out and intelligently fish it to the marketplace. You're going to destroy the industry. It's only a matter of time.
That's what happened to the cod fishery. We ultimately destroyed it because of greed and stupidity. We're practising the same thing here with the lobster fishery. We've been successful because we don't have a cod fishery eating the young animals, and we've improved our technology immensely over the past decade. You've got GPS now as opposed to Loran-C as opposed to just a plain compass. You've got better traps and you've got much more effective boats.
Yet with all that increased technology, the catch rates have not increased over the last decade or so. We've simply stayed apace. My contention is that you're taking more of the resource out of the water. Evidence of that is seen in the average size of the animal you're pulling off the bottom.