CALGARY, Aug. 11, 2017 /CNW/ - Petrowest Corporation ("Petrowest" or the "Company") (TSX:PRW) announces that it has received a notice of termination from Acciona Infrastructure Canada Inc. ("Acciona") pursuant to the general partnership agreement for the Site C main civil works project based on alleged Events of Insolvency and Event of Default. Pursuant to the Notice of Termination:
- Petrowest immediately ceases to have any right to participate in the management or operation of Peace River Hydro Partners ("PRHP") and has been removed from both the Management Committee and the Project Team;
- All the Company's interests in PRHP shall terminate and vest in the remaining partners;
- Petrowest continues to have the obligation to bear its proportionate share of any loss or shared liability;
- PRHP has the right to retain all equipment provided by Petrowest for use by PRHP;
- Petrowest is not entitled to any profit of PRHP; and
- Petrowest shall indemnify PRHP and the other partners for third party claims arising out the alleged Events of Insolvency and Events of Default.
The Notice of Termination alleges each of the following constitute an Event of Insolvency:
- Petrowest's intention to sell a significant part of its assets as disclosed in its interim consolidated financial statements for the three months ended March 31, 2017 (the "Financial Statements"); and
- The Company is unable to pay the accounts of its creditors as they become due as evidenced by the Going Concern Note in the Financial Statements.
The Notice of Termination alleges an Event of Default has occurred as a result of Petrowest failing to pay its proportionate share of PRHP working capital contributions. As of June 30, 2017 PRHP has requested working capital contributions aggregating $60 million of which Petrowest's proportionate share would be $15 million. The Company has contributed $2.5 million of working capital and was in discussions with PRHP with respect to the remaining balance of $12.5 million and offsetting receivables due to the Company from PRHP.
Petrowest is evaluating the basis for the alleged Events of Insolvency and Event of Default and will be providing a response to Acciona.
FORWARD LOOKING INFORMATION:
Certain information and statements contained in this news release constitute forward-looking information. The information and statements contained in this news release that are not historical facts are forward-looking statements. Forward-looking statements (often, but not always, identified by the use of words such as "seek", "plan", "continue", "estimate", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "expect", "may", "anticipate" or "will" and similar expressions) may include plans, expectations, opinions, or guidance that are not statements of fact.
Any forward-looking statements are made as of the date hereof and Petrowest does not undertake to publicly update and review such statements to reflect new events, subsequent events or otherwise, except to the extent events and circumstances have occurred that are reasonably likely to cause actual results to differ materially from material forward-looking information for a period that is not yet complete or as otherwise required by law.
Although management of Petrowest believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Accordingly, readers should not place undue reliance upon any of the forward-looking information set out in this news release. All of the forward looking statements of Petrowest contained in this news release are expressly qualified, in their entirety, by this cautionary statement. The various risks to which Petrowest is exposed are described under "Risk Factors" in Petrowest's Annual Information Form, available under Petrowest's profile on the SEDAR website at www.sedar.com.
Petrowest is a diversified infrastructure company with primary operations based in northeastern British Columbia and Alberta. Petrowest's operations are focused on industrial and civil infrastructure projects, gravel crushing and hauling activities, as well as pre-drilling and post-completion energy services.
SOURCE Petrowest Corporation
For further information: Daryl Rudichuk, Chief Financial Officer at (403) 384-0404 or [email protected]