Noveko International Inc. files a Notice of intention to make a proposal to its creditors
08 Oct, 2014, 10:54 ET
MONTREAL, Oct. 8, 2014 /CNW Telbec/ - Noveko International Inc. (the "Corporation") announces that its Board of Directors approved the filing of a Notice of intention to make a proposal to its creditors pursuant to the provisions of the Bankruptcy and Insolvency Act (the "Act"). The Corporation appointed Richter Advisory Group Inc. to act as trustee in connection with the proposal and to oversee a solicitation process to seek purchasers, strategic partners and/or investors to acquire some or all of the Corporation's assets on a going concern basis or to invest in the Corporation and/or its subsidiaries. As a consequence of such filing, all recourses by the unsecured creditors of the Corporation will be stayed for an initial 30-day period (which may be extended by the Court). During that period, it is expected that the Corporation and its operating subsidiaries will continue to carry on their respective commercial operations.
In connection with the financing closed on September 28, 2011 (the "2011 Financing"), the Corporation granted in favour of a private investment firm, acting in its capacity as administrative agent on behalf of certain lenders (collectively the "Lenders"), hypothecs on all its assets, including the shares it holds in its subsidiaries. The 2011 Financing was reimbursable on September 28, 2013 or, before such date, in the event of a default by the Corporation to comply with all provisions of the agreements governing the 2011 Financing, including maintaining specific financial ratios. In addition, in connection with the 2011 Financing, the Canadian subsidiaries of the Corporation agreed to become guarantors of the Corporation's undertakings and also granted in favour of the Lenders hypothecs on their respective assets.
The Corporation did not comply with all such provisions for the interim periods ended December 31, 2011 and March 31, 2012 as well as for the financial year ended June 30, 2012 but, in each case, the Corporation obtained, from the Lenders, waivers to such defaults. But, the Corporation, being still in default, did not obtain a waiver for the interim period ended September 30, 2011 and, consequently, it lost the benefit of the term and the 2011 Financing became immediately due and reimbursable. However, the Lenders did not exercise their hypothecary rights and continued to finance the operations of the group of the Corporation. Up to this day, all endeavours by Corporation to find other financing have proven unsuccessful. Consequently, the Corporation is unable to reimburse either its secured or unsecured creditors. Within that context, and in accordance with the Act, the Corporation received from the Lenders the prior notice that a secured creditor must give to its debtor to allow it to enforce its security, if it wishes to do so. In such circumstances, the Board of Directors of the Corporation concluded that the filing of a Notice of intention to make a proposal in accordance with the Act was the best option available to the Corporation to protect its interests.
Profile of the Corporation
The Corporation specializes in the air filtration segment by providing its clientele with innovative and eco-energetic filtration solutions. As such, through its subsidiaries, the Corporation designs, develops, manufactures and markets products incorporating its patented air filtration technologies, including air filters, antimicrobial masks and respirators, and other antimicrobial products, including hands sanitizers.
Certain statements set forth in this press release constitute forward-looking statements. These statements are based on the information available at the time they are written, on assumptions made by management, acting in good faith, regarding future events. Although management considers these assumptions reasonable based on the information available at the time they are written, they could prove inaccurate. Forward-looking statements are also subject, by their very nature, to known and unknown risks and uncertainties. The actual results of Noveko International Inc. could differ materially from those indicated or underlying these forward-looking statements. The reader is therefore recommended not to unduly rely on these forward-looking statements. Unless otherwise required under securities laws, the Corporation does not intend and undertakes no obligation to update or revise the forward-looking statements
SOURCE: Noveko International Inc.
For further information: André Leroux, Chairman of the Board and Chief Executive Officer; Gary Mc Cone, Senior Vice-President and Chief Financial Officer, Noveko International inc., Tel: (514) 875-0606
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