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.
OSSimTech, a Montreal, Quebec-based technology company that designs, manufactures and sells virtual reality open surgery simulators, filed an NOI on May 27, listing approximately $3.8MM in liabilities, including $2.2MM to Investissement Quebec and $466.8M to CAE Capital. Deloitte was appointed proposal trustee. Davies is counsel to the company.
Mometal Structures, a Varennes, Quebec-based manufacturer and installer of non-conventional steel structures, was placed in receivership on May 8 on application by HSBC, owed approximately $7.8MM. In early April 2019, the company was placed in HSBC's loan management unit after a 13-week cash flow forecast indicated a $5.6MM deterioration in the company's margin position over a 10-week period. A revised forecast was provided by the company in April that showed no deterioration in the bank's position. This forecast, however, was predicated on the receipt of $11.0MM from EllisDon, the company's largest customer, as advances on future projects. By the end of April, these receipts did not materialize and the company did not have sufficient liquidity to continue operations. Deloitte was appointed receiver. Fasken is counsel for the applicant.
Groupe Paquette Mécanique du Bâtiment Inc., a Laval, Quebec-based mechanical contractor, had its assets placed in receivership on May 6 on separate applications by Caisse Desjardins, owed approximately $7.0MM and Fiera, owed approximately $3.2MM. MNP was appointed receiver over the company's equipment, tools and rolling stock and BLT Lapointe was appointed receiver over the remaining assets. Counsel is Dentons for Fiera, Gowlings WLG for Caisse Desjardins and Miller Thomson for the company.
Wow Air, an Iceland-based airline carrier company that specialized in ultra-cheap flights between North America and Europe, was deemed bankrupt on March 28 by the Icelandic court and ceased operations, leaving thousands of customers stranded or out-of-pocket for future flights. On May 13, the Office de la protection du consommateur (OPC) appointed PwC as claims adjudicator of the claims submitted to the Compensation Fund for Customers of Travel Agents, a financial protection plan administered by the OPC that protects customers who purchased services through licensed travel agencies in Quebec.
Imperial Tobacco, a Montreal, Quebec-based cigarette company that manufactures tobacco products for brands such as Marlboro and Pall Mall, filed for protection under the CCAA on March 12. The company leads the tobacco industry with roughly 48% market share of all legal sales in 2018. The two other major Canadian manufacturers and distributors of tobacco products are Rothmans Benson & Hedges and JTI-Macdonald, the latter of which was granted court protection under the CCAA on March 8. The company is currently facing an existential threat from litigation across Canada, including multiple class actions and government claims seeking to recover health care costs (collectively, the "Tobacco Litigation"). Earlier this month, the Quebec Court of Appeal upheld a 2015 ruling in a lower court that found the tobacco companies concealed the health risks of smoking from the public. The plaintiffs in the Tobacco Litigation are seeking hundreds of billions of dollars in damages, which significantly exceed the company's total assets. FTI Consulting was appointed monitor. Counsel is Osler for the company and Davies for the monitor.
Avara Boucherville Pharmaceutical Services, a Boucherville, Quebec-based international pharmaceutical services company that delivers world-class contract manufacturing and technical services to the pharmaceutical industry, was placed in receivership on February 18 on application by Sandoz Canada, another pharmaceutical company. EY was appointed receiver. Miller Thomson is counsel to the applicant.
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.
Lanla, a Montreal, Quebec-based marketing research company, and Wizper, a digital advice management mobile app driven by customer experience-focused AI technology that is backed by Lanla's 15 years of customer experience expertise, filed NOIs on February 1. EY is the proposal trustee.
Taxelco, a taxi company founded in 2015 with the objective of being an environmentally and socially-friendly tax service, obtained protection under the CCAA on February 1 on application by National Bank, owed approximately $10.2MM. In February 2018, the Caisse de dépôt et placement du Québec, the FTQ Solidarity Fund, Fondaction CSN and XPND Capital agreed to inject $17.0MM into the company to grow its Téo Taxi fleet of electric cars. When it became clear, however, that the firm's financial outlook would not improve, the investors refused to provide any more capital. Richter was appointed monitor. Counsel is Stikeman Elliott for the applicant, McCarthy Tétrault for the monitor and Norton Rose Fulbright for the company.