May 01, 2017
Orbite Provides Corporate Update
MONTREAL, QUEBEC--(Marketwired - May 1, 2017) - Orbite Technologies Inc. (TSX:ORT)(OTCQX:EORBF) ("Orbite" or the "Company") today provided an update on its efforts to emerge from insolvency protection for the benefit all of its stakeholders.
Successful Migration from BIA to CCAA
The Company was subject to creditor protection under the provisions of the Bankruptcy and Insolvency Act ("BIA") after having filed a Notice of Intention to make a proposal on April 3, 2017. The Company filed a petition for continuance of the BIA proceedings under the Companies' Creditors Arrangement Act ("CCAA"). The Superior Court of Quebec granted the petition and issued an Initial Order pursuant to the CCAA on April 28th, 2017. The Company is now under the protection of the CCAA and the Initial Order provides for an initial stay of all proceedings until May 29th, 2017 and appoints PricewaterhouseCoopers as monitor of the business and financial affairs of the Company.
The Company believes that an orderly process under the CCAA will be beneficial to all stakeholders and could also allow for the expedient adjudication of claims that the Company may have against service providers or equipment suppliers.
Calcination Equipment Repairs
The Company and its calcination equipment supplier have met to review in detail the issues observed with the Cap-Chat calcination equipment. Both companies have agreed to set up a task force approach and action plan to resolve these issues in the most expeditious fashion possible. Technical personnel from both companies, including from Orbite's Technology Development Center, will be working together towards this end. In parallel, Orbite will continue to work on the solution it had identified, the installation of a predecomposer.
Investissement Quebec and Canada Economic Development
Orbite has continued to progress discussions with its secured creditors and financial partners and discussions to date have been positive. Investissement Quebec ("IQ") has confirmed that it intends to maintain its loan agreement in place under the current terms and is willing to support Orbite in its restructuring efforts. Based upon discussions to date, the Company is also hopeful that Canada Economic Development ("CED") may do the same for its loan agreements. The repayment of the principal under the main agreements with IQ and CED is scheduled to commence in 2020 and 2021.
The Company will provide further updates as developments occur.
There can be no guarantees that the Company will be successful in its restructuring efforts and maintain the listing of its common shares on the TSX or be able to re-list them on the TSX or on another exchange.
Production Activities, Employee Layoffs and Management Changes
Calcination system cooldown commenced on March 31st and operations were subsequently suspended as the Company concentrates its human and financial capital on implementing the required technical solutions. The Cap-Chat plant is now under care, maintenance and control.
Approximately 39 full time employee equivalents, out of 81, have been temporarily laid-off. Most of these layoffs are at the Cap-Chat plant, but a request has been made by the Company to have 21 employees covered by a work-sharing program offered by the Federal Government. Eligibility under such program has not yet been confirmed.
Mr. Denis Arguin, Vice-President of Engineering and Operations, left the Company on April 28th to pursue other challenges. His responsibilities will be assumed by Mr. Charles Taschereau, Chief Operating Officer.
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