Insolvent Timminco and its Becancour Silicon subsidiary have received a commitment for US$4.25 million to fund the insolvent specialty metal producers’ operations while they restructure under court protection from creditors.
TORONTO: Timminco Ltd. and its Becancour Silicon subsidiary have received a commitment for US$4.25 million to fund the insolvent specialty metal producers’ operations while they restructure under court protection from creditors.
The proposed lender, QSI Partners Ltd., will have an exclusive right until Jan. 31 to negotiate a “stalking horse” bid for Timminco’s business and assets – including partial ownership in the Quebec Silicon Limited Partnership.
Quebec Silicon LP, which isn’t included in Timminco’s court-supervised restructuring, is 51% owned by Dow Corning and 49% by Becancour Silicon.
A stalking horse bid is intended to attract other bidders, in an effort to get the highest price for an insolvent company’s assets.
Timminco said it’s not obliged to accept QSI’s offer to qualify for the $4.25-million debtor-in-possession facility, or DIP financing, which would get precedence for repayment over other creditors.
Documents filed by the court-appointed monitor when Timminco filed for protection under the Companies’ Creditors Arrangement Act, indicated the company will be down to about $500,000 of cash by the end of January, a seasonally slow month for sales.
The Toronto-based company owed a total of $89 million to its creditors when it sought protection, including $26 million to the Quebec government’s provincial investment agency. Timminco also owes $21.9 million in employee benefits.
Timminco said it will ask the court to extend its creditor protection until April 30 and for approval of a process to market its business to other potential buyers after QSI’s exclusivity period ends.
“We are delighted to have achieved this significant milestone,” Timminco chief executive Douglas Fastuca said in a statement.
“This facility provides the necessary funds to allow us to operate throughout the anticipated duration of the CCAA restructuring process. We can now focus on moving toward a successful outcome to the restructuring, through an open and competitive process.”
“In the meantime, we expect to continue to purchase silicon metal from our Quebec Silicon joint venture and ship product to our customers as planned.”
© 2012 The Canadian Press