A company which owns and operates a plant in Hawkesbury is insolvent and is restructuring under the federal Companies’ Creditors Arrangement Act (CCAA). Ecolomondo was granted protection under the law in Québec Superior Court on May 21.
Protection under the CCAA allows Ecolomondo to develop a restructuring plan. According to a press release, the the Initial Order provides a stay of all proceedings and all enforcement actions taken or that may be taken against the company, its subsidiaries and their respective property for an initial period of ten (10) days following the date of issuance of the Initial Order, and the establishment of temporary financing, necessary to carry out these CCAA Proceedings as well as the contemplated restructuring plan.
Construction of the Hawkesbury plant, located at the eastern end of Tessier Street, began in 2019. The Québec-based company focuses on proprietary Thermal Decomposition Process (TDP) technology, which recovers high-value commodities from scrap tire waste, including recovered carbon black (rCB), tire-derived oil (TDO), syngas, fiber, and steel.
The application to the court for CCAA protection indicates 30 people work for Ecolomondo, and 27 of them are employed at the Hawkesbury plant. The Review contacted Ecolomondo and court-appointed monitor KPMG Inc. and inquired about the future of the Hawkesbury facility, but no response was received by the time of publication. KPMG will oversee the restructuring process and report its progress back to the court.
The application for protection under the CCAA is supported by the Company’s principal creditor, Export Development Canada (EDC), a federal crown corporation specializing in financing industries seeking export markets.
According to the application to the court for CCAA protection, even though Ecolomondo had made some headway in their Hawkesury operations, the company is insolvent and unable to raise the funds required to carry the business toward economic and technological viability. The application documents indicate the company is confident that the restructuring tools offered by the CCAA will allow them, upon completion of their restructuring, to position themselves for profitable growth for the benefit of all stakeholders, including in particular their employees, suppliers, partners, creditors and customers.
According to the list of creditors, Ecolomondo owes EDC $54,555,097 and is the only secured creditor. There are a further 69 unsecured creditors for Ecolomondo and its Hawkesbury subsidiary. Two of the listed creditors are in Vankleek Hill, six are in Hawkesbury, one in Plantagenet, and one in Casselman.
On May 21, Ecolomondo announced that Mathieu Couillard, Michael Frankel, Frank Kelly, Véronique Laberge, Christian Paradis, Donald Prinsky and Elio Sorella resigned from the company’s Board of Directors, effective May 21, with Lynn Côté remaining as sole director. Donald Prinsky resigned as Chief Financial Officer (CFO) effective May 21, and Jean-Francois Labbé remains as interim Chief Executive Officer (CEO) of Ecolomondo.
