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Tuesday, December 8, 1998: 10:00 am
Solv-Ex shareholders back company
with cash
By SANDRA RUBIN
The Financial Post
Shareholders of Solv-Ex Corp., which says it has a cheaper way to extract oil from
the Alberta tar sands, are backing the company with cash to support its legal battles
with short-sellers, bankers and U.S. securities regulators.
The added investment is a clear sign there are people who feel the embattled
Albuquerque, N.M., firm has a future - despite its well-publicized troubles in the last
few years.
"Even though we've got all this litigation turmoil floating around, the focus of this
company is to commercialize the technology," Herbert Campbell, Solv-Ex's senior
vice-president, said yesterday.
"Without that, we do all this for nothing."
As first reported in the National Post, Solv-Ex, which has been rocked by wild
swings in its share price and questions about its technology, struck back Friday with a
"massive" lawsuit against seven U.S. short sellers, Deutsche Bank and the bank's
cross-dressing British fund manager who secretly invested millions in the firm.
Solv-Ex alleges in its lawsuit filed in Albuquerque that short-sellers tried to drive the
share price down for profit at the same time Peter Young, a "superstar" fund manager
for Deutsche Bank in London, was trying to corner the market and drive the price up.
The company alleges it was "whipsawed" by the ensuing price swings, and
shareholders, bankers, and regulators became suspicious Solv-Ex was involved in
stock manipulation. The firm says it was unable to raise the money to complete an
extraction plant at Fort McMurray, Alta., as a direct result, and deprived of the
chance to prove its technology works. Deutsche Bank and Mr. Young couldn't be
reached for comment.
The firm is also defending itself against a suit filed in July by the Securities and
Exchange Commission.
Solv-Ex said yesterday 21 non-management investors have bought an $807,000 (all
figures in U.S. dollars) private placement of restricted shares to help fund the two
lawsuits. Separately, investors holding $2.36-million in convertible debentures have
agreed to extend the maturity date to June 30 from Dec. 31.
Solv-Ex shares, which once traded on Nasdaq at $36.79 , lost 50¢ yesterday to
close at 50¢ on the over-the-counter "pink sheets." |
