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Gold/Mining/Energy : Solv Ex (SOLVD) -- Ignore unavailable to you. Want to Upgrade?

To: TheDuke who wrote (5328)	1/30/1998 12:12:00 PM
From: bigtoe	Read Replies (1) \| Respond to of 6735

Duke, Found this on the 'Fort McMurray Today" page (dated 1/29/98): Cash crunch hits Solv-Ex By IRENE THOMAS Today staff Solv-Ex won't be able to make its full payroll beyond the end of January. A Jan. 26 report to the Calgary Court of Queen's bench from accounting firm Price Waterhouse reveals Solv-Ex is experiencing a "cash shortage." Solv-Ex hasn't been "in a position to make payment of amounts due to all parties who have continued to provide goods and services" since July 14, the 12-page document said. The oilsands developer with an experimental plant 70 kilometres north of McMurray first filed for court protection from its Canadian creditors last July. Cash flow projections indicate monthly operating and overhead expenses of $401,439 before post-July 14 liabilities, the report said. As of Jan. 19, Solv-Ex had a cash balance of $130,526. Expenses for payroll, utilities and mortgage payments add up to $48,000 Cdn per week, the report said. It added one option to pay the bills is to "immediately" sell Solv-Ex's acid plant, estimated to be worth $2-million. Cash poor Solv-Ex hasn't paid more than $116,000 in court-related fees as of Jan. 15. That outstanding balance includes the law firm Macleod Dixon, owed approximately $69,000; Price Waterhouse's invoice is about $46,000. "Macleod Dixon are holding a $100,000 retainer to be applied to their fees," said the report. The $150,000 retainer held by Price Waterhouse Ltd. was applied to an invoice of $196,000 leaving an outstanding balance of $46,000. To restructure and preserve assets, it's essential Solv-Ex obtain immediate funding from the sale of assets or from debtor in possession financing, said the report. Debtor in possession financing helps companies continue operation while their assets are sold. But the $750,000 US in DIP financing expected from Koch Exploration of Calgary -- currently in the process of buying Solv-Ex's assets for $30-million Cdn -- hasn't arrived and the report doesn't say why. Reached this morning, Koch spokeswoman Tammy Sauer couldn't offer an explanation. Koch is aiming to close the deal by Feb. 15, she said. One sale condition is for the province to grant Koch a 15-year renewal of Solv-Ex's oilsands lease. The government hasn't announced its decision. Under the deal for Solv-Ex's assets, Koch will be the majority owner with a 78-per-cent stake while Solv-Ex retains a 12-per-cent share and United Tri-Star Resources Ltd. of Toronto left with 10 per cent. To date, more than $28.7 million Cdn and $39.4 million US in claims have been filed against Solv-Ex.[end] Anyone have any idea why the DIP financing hasn't come through? regards, bigtoe