Orbite seeks stay of proceedings amid worsening finances
Published: Thursday, 27 April 2017
Production operations will be suspended at the Cap-Chat HPA facility while the company assesses options to restructure its debt.
Canadian high-purity alumina (HPA) producer Orbite
Technologies Inc. announced it has filed for stay of
proceedings on creditors under the Bankruptcy and Insolvency
Act, as the company’s debt burden became difficult
to manage under current circumstances.
Orbite’s decision to enter the process
– aimed at preventing the insolvency from worsening
– has come after a series of issues incurred at the
company’s recently-opened HPA plant in Cap-Chat,
Quebec, related to the electrical heating system of the
supplied calcination equipment.
This added to existing external capital costs and could have
led to a default of the company’s credit
facilities – a scenario Orbite wanted to avoid.
The company said the move is "the best way to protect all
stakeholders and will best facilitate its efforts to
renegotiate its debt".
Under the terms of the Notice of Intention (NOI) that was
filed, a 30-day stay of proceedings will take place to prevent
creditors to seize the company’s assets, while
restructuring plans are pursued. This period can be renewed by
a court order.
Production operations will be suspended while a solution to
raise sufficient capital to meet its credit necessities is
"Failure by the company to achieve its financing and
restructuring goals will likely result in the company becoming
bankrupt," Orbite said in a statement.
PricewaterhouseCoopers Inc. has been appointed as the
company’s trustee in the proceedings.
Orbite’s shares are expected to be suspended
from trading on the TSX. The suspension will last for as long
as the company will not meet the requirements for renewed
The Cap-Chat plant finally started running in October last
year. Production output reached 1tpd HPA by the end of
This article from the May Industrial Minerals
on 4 April 2017.