Ecolomondo enters CCAA as tire-recycling plant runs out of capital

Ecolomondo Corporation (TSXV:ECM) and four related entities, a group of cleantech companies with a tire recycling facility in Hawkesbury, Ontario, obtained CCAA protection on May 21, 2026.

The public cleantech company uses proprietary thermal decomposition technology to convert end-of-life tires and other hydrocarbon waste into oil, steel, recovered carbon black powder and syngas. The group employs 30 people, most at the Hawkesbury plant, and operates through Ecolomondo Hawkesbury, while Ecolomondo Corporation holds the shares and licenses intellectual property to the operating company.

The company’s technology has a long development history. R&D began in 1992, a pilot facility was commissioned in Contrecoeur in 2005, and Eliot Sorella acquired the pilot plant and related intellectual property in 2007. Ecolomondo became public in 2017 and, in April 2019, Ecolomondo Hawkesbury entered into a $32.125 million loan agreement with Export Development Canada to partially fund the design, engineering, development and construction of the Hawkesbury facility.

The Hawkesbury facility was designed as a 46,200 square-foot plant with 2 reactors. Once fully ramped up, it was expected to process approximately 1.3 million to 1.5 million end-of-life tires annually and produce 4,000 metric tons of recovered carbon black, 5,000 metric tons of pyrolysis oil, 2,000 metric tons of steel and 1,200 metric tons of process gas. That ramp-up did not occur. The record points to COVID-19 construction delays, under-engineered specialized equipment, equipment breakdowns, replacement-equipment costs, operating instability and repeated full or partial shutdowns.

EDC has remained the central lender. The original 2019 facility was followed by a July 2024 $3 million facility and a January 2025 $2 million facility, later amended in January 2026 to increase availability to $4.7 million. Between 2023 and the filing, EDC also agreed to multiple amendments, deferrals and additional advances of approximately $7 million. As of May 11, 2026, EDC was owed approximately $54.6 million including accrued interest.

The immediate liquidity trigger was a failed funding condition. Under EDC’s most recent loan agreement, Ecolomondo Corporation was required to inject $500,000 into Ecolomondo Hawkesbury by the end of April 2026. Despite attempted capital-raising and a private placement, it could not do so. Ecolomondo Hawkesbury also could not demonstrate that it would maintain cash levels satisfactory to EDC after any further advance. The debtors say they are insolvent and have no workable liquidity solution outside CCAA proceedings.

As of December 31, 2025, the group reported approximately $54 million in assets, including approximately $53.4 million of long-term assets tied largely to Hawkesbury property, plant and equipment, against approximately $55.5 million in liabilities. Cash was only $10,196. The group recorded net losses of approximately $4 million in 2024 and approximately $3.3 million in 2025. Supplier debt was estimated at approximately $1.7 million as of May 14, 2026, while accrued vacation and sick leave totalled $53,868 as of May 19.

The restructuring plan is to stabilize the business, assess operating alternatives and launch a SISP, with a near-term objective of preventing erosion of asset value pending an eventual going-concern sale. EDC Is providing a DIP loan.

KPMG is the monitor. Counsel is Sarrazin Plourde for the debtors, and McCarthy Tétrault for the monitor.