February 11, 2019

Filing Type:

Company Counsel: Norton Rose Fulbright

Trustee: PwC

Trustee Counsel: Fasken

Industry:

Province:

Sural Québec ("SQ"), a Victoriaville, Quebec-based greenfield plant that manufactures and commercializes aluminum rods, and Sural Laminated Products of Canada ("SLPC"), a Becancour, Quebec-based rod plant, filed for protection under the CCAA on February 11, listing approximately $142.0MM in liabilities, including $39.3MM to Investissement Québec and $41.3MM to BMO. The two companies are part of a large global group of privately owned companies operating four rod mills in the aluminum sector. In 2014, this group acquired the Becancour plant from Alcoa Canada and entered into a 10-year supply contract with it to provide SLPC with 100,000 metric tons per year of molten aluminum. SQ has experienced higher losses than forecast primarily because of schedule delays caused by, amongst other things, the death of a worker and construction cost overruns. The problems experienced by SQ impacted the SLPC operations. Furthermore, in fall 2018, Alcoa informed SLPC that its molten metal production would no longer be sufficient to meet SLPC's demand. Compounding these existing issues, the US announced in May 2018 that tariffs of 25% on imports of Canadian steel and 10% imports of Canadian aluminum would take effect on June 1, 2018. These tariffs significantly increased working capital pressures on the group as it scrambled to negotiate price concessions with its metal supplier and price premiums with its clients. By February 2019, SLPC's indebtedness to Alcoa increased to approximately $40.0MM, and it sent the company a notice requesting payment. PwC was appointed monitor. Counsel is Norton Rose Fulbright for the companies, Fasken for PwC, BLG for BMO and Lavery de Billy for Investissement Québec.

Close Menu