MONTREAL, QUEBEC--(Marketwired - May 1, 2017) - Orbite Technologies Inc. (ORT.TO)(EORBF) ("Orbite" or the "Company") today provided an update on its efforts to emerge from insolvency protection for the benefit all of its stakeholders.
Successful Migration from BIA to CCAA
The Company was subject to creditor protection under the provisions of the Bankruptcy and Insolvency Act ("BIA") after having filed a Notice of Intention to make a proposal on April 3, 2017. The Company filed a petition for continuance of the BIA proceedings under the Companies' Creditors Arrangement Act ("CCAA"). The Superior Court of Québec granted the petition and issued an Initial Order pursuant to the CCAA on April 28th, 2017. The Company is now under the protection of the CCAA and the Initial Order provides for an initial stay of all proceedings until May 29th, 2017 and appoints PricewaterhouseCoopers as monitor of the business and financial affairs of the Company.
The Company believes that an orderly process under the CCAA will be beneficial to all stakeholders and could also allow for the expedient adjudication of claims that the Company may have against service providers or equipment suppliers.
Calcination Equipment Repairs
The Company and its calcination equipment supplier have met to review in detail the issues observed with the Cap-Chat calcination equipment. Both companies have agreed to set up a task force approach and action plan to resolve these issues in the most expeditious fashion possible. Technical personnel from both companies, including from Orbite's Technology Development Center, will be working together towards this end. In parallel, Orbite will continue to work on the solution it had identified, the installation of a predecomposer.
Investissement Québec and Canada Economic Development
Orbite has continued to progress discussions with its secured creditors and financial partners and discussions to date have been positive. Investissement Québec ("IQ") has confirmed that it intends to maintain its loan agreement in place under the current terms and is willing to support Orbite in its restructuring efforts. Based upon discussions to date, the Company is also hopeful that Canada Economic Development ("CED") may do the same for its loan agreements. The repayment of the principal under the main agreements with IQ and CED is scheduled to commence in 2020 and 2021.
The Company will provide further updates as developments occur.
There can be no guarantees that the Company will be successful in its restructuring efforts and maintain the listing of its common shares on the TSX or be able to re-list them on the TSX or on another exchange.
Production Activities, Employee Layoffs and Management Changes
Calcination system cooldown commenced on March 31st and operations were subsequently suspended as the Company concentrates its human and financial capital on implementing the required technical solutions. The Cap-Chat plant is now under care, maintenance and control.
Approximately 39 full time employee equivalents, out of 81, have been temporarily laid-off. Most of these layoffs are at the Cap-Chat plant, but a request has been made by the Company to have 21 employees covered by a work-sharing program offered by the Federal Government. Eligibility under such program has not yet been confirmed.
Mr. Denis Arguin, Vice-President of Engineering and Operations, left the Company on April 28th to pursue other challenges. His responsibilities will be assumed by Mr. Charles Taschereau, Chief Operating Officer.
Orbite Technologies Inc. is a Canadian cleantech company whose innovative and proprietary processes are expected to produce alumina and other high-value products, such as rare earth and rare metal oxides, at one of the lowest costs in the industry, and in a sustainable fashion, using feedstocks that include aluminous clay, kaolin, nepheline, bauxite, red mud, fly ash as well as serpentine residues from chrysotile processing sites. Orbite is currently in the process of finalizing its first commercial high-purity alumina (HPA) production plant in Cap-Chat, Québec and has completed the basic engineering for a proposed smelter-grade alumina (SGA) production plant, which would use clay mined from its Grande-Vallée deposit. The Company's portfolio contains 15 intellectual property families, including 50 patents and 52 pending patent applications in 11 different countries and regions. The first intellectual property family is patented in Canada, USA, Australia, China, Japan and Russia. The Company also operates a state of the art technology development center in Laval, Québec, where its technologies are developed and validated.
Certain information contained in this document may include "forward-looking information". Without limiting the foregoing, the information and any forward-looking information include statements regarding projects, costs, objectives and future returns of the Company or hypotheses underlying these items. In particular, statements concerning (i) the solution identified and believed to remedy the issues with the Cap-Chat calcination equipment, (ii) the setting-up of a task force with the equipment supplier to resolve the issues observed with the Cap-Chat calcination equipment, (iii) the expectation that Canada Economic Development will maintain the loan agreements in place and support Orbite's restructuring efforts are all forward-looking statements. In this document, words such as "may"," confident", "would", "could", "will", "likely", "believe", "expect", "anticipate", "intend", "plan", "estimate" and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved.
Forward-looking statements and information are based on information available at the time and/or the Company management's good-faith beliefs with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Company's control. In particular, the solution identified to remedy the electrical heating system issues and increase the capacity of the decomposer to 5 tpd, and the costs and time required to implement such solution is based in particular on the Company's available data and experience to date and that the operation of the HPA plant will continue as experienced and anticipated, the costs of materials and labour remaining at current levels, and the ability to keep the operations relating to such equipment running in the normal course. Factors that could impact the Company's expectations expressed in the forward looking statements include (i) with respect to costs and timing, an increase in the price of materials and/or labour costs, unavailability of qualified personnel, inability to operate in the normal course, breakdown or failure of equipment of processes, design errors, operator errors, non-performance by third party contractors and major incidents or catastrophic events such as fires and explosions; (ii) with respect to the current discussions with its equipment supplier, the inability to provide technical solutions on terms and timelines acceptable to the Company; (iii) with respect to obtaining support in the restructuring efforts, the inability to find lenders willing to provide financing or at terms acceptable to the Company, a deterioration in market or economic conditions limiting the supply of funds by lenders or increasing the cost thereof, actions or demands for repayment by existing lenders and other factors impacting financing. Risks, uncertainties and other factors that could affect anticipated results and future events also include, but are not limited to, those described in the section of the Management's Discussion and Analysis (MD&A) entitled "Risk and Uncertainties" as filed on March 31, 2017 on SEDAR, including those under the headings "Going Concerns", Commercial Operation of HPA Plant", "We will need to raise capital to continue our growth" and "Development Goals and Time Frames".
The Company does not intend, nor does it undertake, any obligation to update or revise any forward-looking information or statements contained in this document to reflect subsequent information, events or circumstances or otherwise, except as required by applicable laws.