MEDIA / Genoil Inc. Reaches Deal To Get Money Back
Saturday, December 20, 1997
The Financial Post
Calgary junior oil company Genoil Inc. has reached a deal with Montreal affiliate St. GeneviŠve Resources Ltd. over unauthorized borrowings of $5.2 million from its accounts.
Genoil also said Friday it will hold a special shareholders' meeting Jan. 14 in Calgary to seek approval for the reconstitution of its board of directors and a new mandate for the company.
On Dec. 5, the company said money had been transferred from its accounts just before St. GeneviŠve Resources and another affiliate, KWG Resources Ltd., were forced to seek court protection from creditors.
St. GeneviŠve has attributed its troubles to a bid to finance a gold project in Russia.
Under the agreement announced Friday, St. GeneviŠve will pay for Genoil's continuing operations, including rent and salaries.
Any money paid by St. GeneviŠve will be go to reduce the $5.2 million in unauthorized borrowings.
In addition, St. GeneviŠve will pay Genoil $75,000 a week from Friday until the day it obtains court approval of a plan under the Companies' Creditors Arrangement Act.
Genoil said that money will be used to pay its own creditors.
St. GeneviŠve will repay any money still owing to these creditors to Genoil within three days of the ratification of its restructuring plan.
Genoil's 16.8 million shares (GNOL/CDN) are listed over the counter on the Toronto Stock Exchange's Canadian Dealing Network. On Friday, the stock closed at 18›, down 2›.
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