MONTRÉAL, QUÉBEC--(Marketwired - April 3, 2017) - Orbite Technologies Inc. (TSX:ORT)(OTCQX:EORBF) ("Orbite" or the "Company") announces today that it has filed a Notice of Intention (the "NOI") to make a proposal under the Bankruptcy and Insolvency Act (Canada) (the "BIA").
This filing follows the Company's announcement by way of press release on March 31, 2017 of material issues with the electrical heating system of the Outotec supplied calcination equipment at the Company's High Purity Alumina plant, including additional external capital costs and time required to remedy the issues, the anticipated default under the Company's credit facilities, and the ensuing existence of material uncertainty about the Company's ability to continue as a going concern.
Orbite regrets having to take this measure, but after carefully reviewing all relevant circumstances with the help of its advisors, the Company believes this measure is the best way to protect all stakeholders and will best facilitate its efforts to renegotiate its debt, work through the potential insurance coverage and raise the funds needed to remedy the supplied equipment issues. The filing of the NOI has the effect of imposing an automatic 30-day stay of proceedings that will protect the Company and its assets from the claims of creditors while the Company pursues its restructuring efforts. This 30-day period may be renewed with the authorization of the Court.
The initial NOI period will allow Orbite to evaluate, with its partners, all available legal recourses and financial alternatives that may allow the Company to resume its production efforts as soon as possible and hopefully continue as a going concern.
As announced in its press release of March 31, 2017, operations will be suspended as the Company concentrates its human and financial resources on efforts to raise capital and implement the contemplated solution to the Outotec supplied equipment issues. There can be no guarantee that the Company will be successful in securing further financing, curing the supplied equipment issues or achieving its restructuring objectives. Failure by the Company to achieve its financing and restructuring goals will likely result in the Company becoming bankrupt.
Pursuant to the NOI filing, PricewaterhouseCoopers Inc. has been appointed as the trustee in the proposal proceedings of Orbite, and in that capacity will monitor and assist the Company in its restructuring effort.
Following this announcement, the Company expects the Toronto Stock Exchange (the "TSX") to suspend trading of the Company's common shares and commence a delisting review with respect to whether Orbite continues to meet the TSX requirements for continued listing. There is no certainty as to timing or likelihood that the common shares will recommence trading on the TSX or any other market.
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 electrical heating system issues and increase the capacity of the decomposer to 5 tpd, (ii) the estimated costs and time required to implement such solution, (iii) the examination and exercise of legal remedies to recover costs and damages relating to the electrical heating system issues, (iv) insurance coverage to recover costs associated with repairing the heating element system and the fixed costs incurred during the downtime experienced and (v) available options to raise funds and limit cash outflows 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 legal remedies, factors that may impact claims and legal proceedings, such as interpretation of factual matters, time and money involved in undertaking legal proceedings, uncertainty as to the final result and other risks; (iii) with respect to insurance, factors that may impact claims and coverage, including interpretation of factual matters, exclusions, and denial or limitation of coverage; and (iv) with respect to financing, 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.