Canadian waste conversion technology firm shuts down gasification plant.
Ottawa, Ontario-based
Plasco Energy Group Inc. announced has obtained an order from the Ontario Superior Court of Justice approving the company’s application under the Companies’ Creditors Arrangement Act (CCAA). The company’s CCAA proceedings will, among other things, provide the company with time and stability to explore potential strategic alternatives that may be available to the company.
The CCAA is a Canadian statute that allows insolvent corporations owing more than $5 million to restructure their business and financial affairs. The main purpose of the CCAA is to enable financially distressed companies to avoid bankruptcy or foreclosure or seizure of assets while maximizing returns for their creditors and preserving both jobs and the company's value as a functioning business.
Plasco says it is a pre-revenue, development stage technology company that requires additional time and funding to refine and commercialize its waste conversion technology. To accomplish this, Plasco has engaged Houlihan Lokey Capital Inc. as its financial advisor to assist the company in identifying potential purchasers of or investors in the business.
Under the initial order, among other things, the company has been granted a stay of proceedings, staying creditor claims against Plasco and its subsidiaries during the CCAA process, and Ernst & Young Inc. has been appointed as the monitor of the company in the proceedings.
In conjunction with the CCAA proceedings, Plasco is implementing cash conservation measures. The company says it has sufficient funds to finance its working capital requirements at the present time and will continue to make post-filing payments to its suppliers and service providers in the normal course.
Plasco management will remain responsible for the day-to-day operations of the company. Plasco also has engaged Randall Benson, a partner and national practice co-leader, restructuring and turnaround for KPMG, as its chief restructuring officer to assist the company with its restructuring process.
“Plasco will explore potential strategic alternatives that may provide the company the funding required to pursue commercial development of its technology,” says Benson. “Our key objectives are to preserve the value of the business for the benefit of the company’s stakeholders and to continue work towards demonstrating the performance of the technology.”
Additional information regarding the company’s CCAA proceedings, including court materials, will be made publicly available on the Monitor’s website at
http://documentcentre.eycan.com. Plasco will provide further updates throughout its restructuring process.
Plasco describes its conversion technology as a sustainable solution that helps communities achieve their landfill diversion and renewable energy goals. Plasco owns a plasma gasification site in Ottawa that has shut down, according to the Ottawa Sun. The article also notes the company laid off 80 people; 25 employees remain.
