RE:LaPresse Feb. 20, 2020 article
The outcome is approaching for Orbite, specialized in the aluminum sector
PHOTO DAVID BOILY, PRESS ARCHIVE
There is no more money to pay the considerable costs of maintaining the Technologies Orbite plant, located in Cap-Chat, in the Gasp Peninsula.
Three years after coming under the protection of the law to avoid bankruptcy, Technologies Orbite, who has already been a Quebec stock market star, is coming to the end of the road. If the Australian company interested in its technology does not commit in a few days to present a restructuring plan, it will be the bankruptcy and the dismantling of the factory of Cap-Chat, in Gaspsie.
Posted on February 20, 2020 at 8:00 a.m.
Hlne Baril
The Press
There is no more money to pay the considerable costs of maintaining the plant, said trustee Christian Bourque of PricewaterhouseCoopers. "The available funds will be used up at the end of next week," he said in an interview with La Presse.
Technologies Orbite had the ambition to manufacture with a patented process high purity alumina and other oxides in great demand on the market. After experiencing operational problems at its Cap-Chat plant, the company sought legal protection to avoid bankruptcy.
It was in April 2017. After almost three years of efforts to find a buyer, the only hope now lies in a letter of intent filed with the trustee by AEM HPA Pty, a private company established in Australia which is mainly interested to Orbite technology.
AEM intends to acquire a license for the intellectual property rights of Orbite for $ 500,000 and to lease its facilities in Cap-Chat and Laval, where its technology development center is located. A restructuring plan could be offered to secured creditors, to whom Orbite owes $ 53 million.
Never seen
So far, the court has accepted four interim financing proposals to keep the business going and find a way to restart it. The result is "four floors of debt," a situation so complex that trustee Christian Bourque says he has seen nothing like it before.
There are significant investments, technology and jobs at stake.
Christian Bourque, of PricewaterhouseCoopers
The last of the long series of time limits granted by the court is set for March 14. Before this date, the prospective buyer will have to undertake to present a restructuring plan to the creditors of Orbite. Failing such a commitment, it will be bankruptcy, according to the trustee.
The Quebec government believed in Orbit Technologies and invested more than 20 million in its project. Investissement Qubec made two loans, one of 5 million and one of 2 million, in addition to investing 15 million in equities.
"A boucan show"
Whether there is restructuring or bankruptcy, small Orbite shareholders risk losing everything.
Like those of Nemaska Lithium, who are in the same situation, the small shareholders of Orbite have joined forces to avoid the sale or dismantling of the Cap-Chat plant.
Their spokesperson, Lorenzo D’Alesio, finds it scandalous that the trustee is about to sell the technology developed by Orbite to an Australian company for a bite of bread. "AEM has no plans to relaunch the business," he said. She wants to rent the facilities while she gets her hands on the technology. It’s a boucan show. "
The small group of shareholders asked the Minister of Economy, Pierre Fitzgibbon, for a financial contribution to the feasibility study which they undertook to verify the viability of the plant and prepare a recovery plan.
According to Mr. D’Alesio, it is possible to revive Orbite and keep its technology in Quebec with an investment of ten million dollars.
Their proposal arrives late in the process, too late to be taken into consideration by the trustee who does not think he can get a new deadline and more funding to continue his work.
But even if Orbite eventually goes bankrupt, the group of small shareholders intends to continue to work on its recovery plan and present it to the government. "The factory must not be dismantled," pleads Lorenzo D’Alesio.