CALGARY, A.B. – Petrowest Corporation will file for receivership on Tuesday.
According to a press release late Sunday, Petrowest Corporation, one of three companies that joined together to form Peace River Hydro Partners will seek receivership in an Alberta court.
Banks for Petrowest Corporation have provided notice demanding immediate repayment of all amounts owing. The company and it’s banks created a bridge loan on May 19, 2017. That loan is fully drawn and no additional sources of credit or funding are available. The company’s board of directors have consented to the appointment of a receiver.
After the hearing on Tuesday, the receiver, will be charged with managing the day to day operations of the company.
On Friday, Petrowest also announced that it has received a notice of termination from Acciona Infrastructure Canada pursuant to the partnership agreement for the Site C main civil works project. According to a press release, the termination notice is based on alleged events of insolvency and default.
The Notice of Termination alleges that Petrowest’s intention to sell a significant part of its assets as disclosed in its 2017 first quarter financial statements, and that it is unable to pay the accounts of its creditors as they became due, both constitute an Event of Insolvency. The termination notice alleges an Event of Default occurred after Petrowest failed to pay its proportionate share of Peace River Hydro Partners’ working capital contributions.
As of June 30th this year Peace River Hydro Partners has requested working capital contributions totalling $60 million, of which Petrowest’s proportionate share would be $15 million. Petrowest contributed $2.5 million of working capital and was in discussions with Peace River Hydro Partners about the remaining $12.5 million balance, and offsetting receivables due from Peace River Hydro Partners.
B.C. Hydro spokesperson Mora Scott said that BC Hydro is aware of the notice of termination from Acciona Infrastructure Canada, terminating Petrowest’s membership in Peace River Hydro Partners. The two companies, along with Samsung C&T Canada, joined together in a consortium that successfully bid for Site C’s main civil works contract.
In an email, Scott said that, “BC Hydro carefully manages all contracts on the project to protect our customers from this type of commercial dispute. Both Acciona and Samsung are large, multi-national corporations with extensive operations and experience in the development, engineering and construction of significant infrastructure projects.”
Scott added that Hydro is confident that the two remanning partners, Acciona and Samsung, have the resources to deliver on the contracts that they’ve signed with the Crown Corporation. She said that Hydro does not anticipate the development to have an impact on the project’s employment.