Energold Drilling

a Vancouver, British Columbia-based drilling contractor, obtained protection under the CCAA on September 13. Operating in 25 countries, the company's revenues have been adversely impacted by the deterioration of the markets it serves - in particular, the general downturn in mining that commenced in or around 2012 and the subsequent general downturn in oil and gas that commenced in or around 2014. While conditions in the mining sector have shown some signs of improving in recent years, neither the mining or energy sectors have recovered to their previously robust levels of activity. The company's restructuring plan includes reducing its debt load, cutting costs in its corporate office, selling non-core assets and refocusing attention to its remaining operating units. FTI was appointed monitor. EY was appointed financial advisor to the company. Portage Point Partners was appointed CRO. Counsel is BLG for the company, Cassels Brock for the monitor, Gowling WLG for EDC, Clark Wilson for Extract Advisors LLC as administrative agent to the secured noteholders, McCarthy Tétrault for RBC and Stikeman Elliott for the DIP lender.

Stornoway Diamond (TSX-SWY)

Stornoway Diamond (TSX-SWY), a Montreal, Quebec-based diamond mining company that owns and operates Quebec's first and only diamond mine, obtained protection under the CCAA on September 9. Construction of the company's mine in Northern Quebec commenced in 2014, funded by a $946.0 million financing package that included equity, senior and convertible debt, equipment financing and the world's first ever diamond stream. The project was heavily supported by the Quebec government, which considered the mine an integral component of its "Plan Nord" initiative to enable development of the northern part of the province and its local communities. Commercial production commenced in 2017, but the mine's performance fell significantly short of expectations as a result of delays in the ramp-up of the mine, lower grade ore, and higher-than-anticipated levels of diamond breakage. Adding to the company's difficulties was a declining price for rough diamonds. When production commenced, the market price was US $147/carat. By the second quarter of 2019, the price was only US $76 / carat. Unable to operate profitably under its current conditions, and with no additional liquidity available, the company concluded that it had to restructure its balance sheet and launched a sale and investment solicitation process in April 2019. The process led to a proposed transaction with certain of the company's existing stakeholders, which the company will attempt to complete while under creditor protection. Deloitte was appointed monitor. Counsel is Norton Rose Fulbright for the company, Osler for the monitor, McCarthy Tétrault for Investissement Québec and Diaquem and Fasken for the Caisse.

Gedex Systems

Gedex Systems, a Mississauga, Ontario-based developer of airborne geological imaging technology, obtained protection under the CCAA on August 12, on application by FCMI, a secured creditor owed approximately US $10.3 million. Gedex was in the process of developing a proprietary system to discover and develop underground mineral and oil and gas resources but had not yet reached the stage of commercial profitability. Facing a working capital deficiency of over US $9.5 million and an operating deficit in excess of US $91.8 million, the company recently laid off all of its remaining employees and was canvassing the market for a potential purchaser or investor. The CCAA filing is intended to preserve the going concern value of the company while a court-supervised SISP is conducted. Zeifmans is the monitor. Counsel is Dentons for the applicant, DLA Piper for the company and Miller Thomson for the monitor.

Miniso Canada

Miniso Canada, the Canadian-based retailer of Miniso, a global retail brand ("Miniso Global"), obtained protection under the CCAA on July 11. Launched in 2017, the Canadian company has grown to 67 stores across the country, operating under a license agreement with Miniso Global. A dispute arose in the fall of 2018 over the quantum of debt owed to Miniso Global which led to Miniso Global demanding repayment and filing a bankruptcy application against its Canadian partner. A forbearance agreement was ultimately reached in January 2019 between the parties that required Miniso Canada to, among other things, enter into good faith negotiations for the sale of the Canadian operations to Miniso Global. A transaction never transpired, and when the forbearance agreement expired on June 25, repayment was again demanded. Rather than appointing a receiver, Miniso Global elected to make an application for CCAA protection for the Canadian company so as to maintain enterprise value. Alvarez & Marsal was appointed monitor and has been given enhanced powers to manage the Canadian operations during the proceedings while a restructuring transaction is pursued. Counsel is Fasken for Miniso Global, McMillan for Miniso Canada and Dentons for the monitor.

ILTA Grain

ILTA Grain, a Surrey, British Columbia-based grain producer, filed for protection under the CCAA on July 7, listing $149.5MM in liabilities. Founded in 2011, the company has become one of the two largest processors of quality grains in Canada, operating from six state-of-the-art facilities in Saskatchewan. As part of its growth strategy, the company has made significant efforts to export its products internationally. Over the past few years, however, the company has faced increasingly challenging international trade conditions as countries such as India, China and Saudi Arabia have decided to limit, and in some cases, entirely discontinue their Canadian imports. The reduction in international sales, coupled with a highly leveraged balance sheet, has left the company without the working capital necessary to fund operations and service its debt. While under creditor protection the company will explore its strategic alternatives, including conducting a sale and investment solicitation process. PwC was appointed monitor. Stikeman Elliott is counsel for the company.

North American Lithium

North American Lithium, an Abitibi, Quebec-based minerals mining company, obtained protection under the CCAA on May 28, owing its creditors approximately $210.0MM, including $99.0MM to Investissement Québec (IQ). Until recently, the company operated a mine producing spodumene, the mineral from which lithium, a chemical widely used to produce batteries, is extracted. The lithium battery market is principally located in China. In recent months, the global price of both lithium carbonate and spodumene have plummeted by 60% as a result of increased supply, primarily from Australia, where producers have lower extraction costs and are in closer proximity to the Chinese markets. Unable to operate profitably under the new market conditions, the company halted production in February 2019. Shortly thereafter, the Minister of Energy and Natural Resources advised that it would commence enforcement proceedings against the company unless it put up a financial guarantee of approximately $23.0MM to cover the costs of a potential rehabilitation and restoration plan. While under creditor protection, the company intends to explore a recapitalization of the business. Raymond Chabot was appointed monitor. Counsel is Fasken for the company, McCarthy Tétrault for IQ, Norton Rose Fulbright for shareholder Contemporary Amperex Technology Canada and Woods for shareholder Jien International Investment.

British Confectionery Company and British Baazar Company

British Confectionery Company and British Baazar Company, a St. John's, Newfoundland and Labrador-based manufacturer of specialty paper, obtained protection under the CCAA on April 29. The company, which focuses on manufacturing break-open lottery and promotional products, had previously filed an NOI on November 5. Attributing its financial difficulties to a variety of factors including product recalls, a fire at its production facility, and lower margins on new contracts, the company was able to attract an investor during the proposal proceedings. The investor's offer contained several conditions though, including the requirement that the province participate in providing financing to the company. Though the province seemed willing, it indicated that as a result of the calling of a provincial election, there would be a moratorium on such decisions until after the new government is installed. The company therefore converted its proceedings from the BIA to the CCAA to allow additional time for the province and investor to consider the transaction. Deloitte is the monitor. BoyneClarke is counsel for the company.

Strategic Oil & Gas (TSX-V: SOG)

Strategic Oil & Gas (TSX-V: SOG), a Calgary, Alberta-based junior oil and gas company, along with its wholly owned subsidiary, Strategic Transmission, obtained protection under the CCAA on April 10. Focused primarily on oil and gas development in Northern Alberta, the company cites several key factors that have led to its current financial position, including deteriorating differentials on Canadian oil prices and political uncertainty with respect to pipeline approvals at the Federal level. In June, 2018, the company entered into a transaction to sell certain of its assets. Despite the sale closing, however, the proposed purchaser was unable to meet the Liability Management Ratio requirements of the Alberta Energy Regulator to facilitate the necessary license transfers. As a result, Strategic was forced to unwind the transaction, further weakening its financial position. With no capital available to fund further development and drilling improvements, the company will look to complete a sale and investment solicitation process while under creditor protection. KPMG was appointed monitor. Counsel is Dentons for the applicant and Torys for the monitor.

Bondfield

Bondfield, a Toronto, Ontario-based construction company with over $1B in current outstanding construction projects for major public-sector institutions across Ontario, obtained protection under the CCAA on April 3. Operating successfully for over 45 years, the company has run into significant financial and operational challenges in the past two years as it has taken on bigger P3 projects. Since August, 2018, the company's surety, Zurich Insurance, has funded the entirety of Bondfield's operations, including overhead, that could not otherwise be funded by ordinary course cash flow. Bondfield applied for creditor protection in early March, but Bridging Finance ("Bridging"), the company's senior lender, requested that the court adjourn the application to allow for a consensual restructuring approach to be agreed upon between Bridging, Bondfield and Zurich. Following extensive negotiations, a CCAA filing agreement was entered into. Under the agreement, Zurich will provide a DIP facility to fund overhead and Bridging will provide a DIP facility to fund certain litigation. EY was appointed monitor. Counsel is Osler for the company, Norton Rose Fulbright for the monitor, Goodmans for Bridging and BLG for Zurich.

Rothmans, Benson & Hedges

Rothmans, Benson & Hedges, a Toronto, Ontario-based company that produces and sells tobacco products in Canada, filed for protection under the CCAA on March 22. It is the third and last of the big three Canadian tobacco companies to obtain creditor protection this month. The company has two primary business segments: it is the second largest supplier of traditional tobacco products in the Canadian market, and it sells and distributes IQOS products, smoke-free electronic tobacco devices which it purchases from Philip Morris. In addition to two class action proceedings commenced against the company in Quebec, the company is a defendant to a number of other putative class actions, individual actions and government-initiated proceedings throughout Canada. The company has been held liable for approximately $13.5B as a result of the Quebec Appellate decision. EY was appointed monitor. Counsel is McCarthy Tétrault for the company, Cassels Brock for the monitor and Gowling WLG for Philip Morris.

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