Judicial restructuring | Selection Group assets at auction

The judicial restructuring of Groupe Sélection takes a new turn: the person in charge of the process requests the green light to auction the assets of the real estate developer and operator of residences for the elderly (RPA), which is still insolvent.

This information is contained in the most recent report prepared by the monitor Christian Bourque, of PwC, within the framework of the procedures which take place under the Companies Creditors Arrangement Act (CCAA) since last November. In the 25-page document, we understand that everything that has not already been the subject of an agreement by mutual agreement with a buyer will be offered to everyone.

“The controller is of the opinion that the time has come to launch a process of sale or solicitation of investment,” writes Mr. Bourque. This is to optimize the chances of recovering the best value for the goods […] or to find an investor likely to facilitate the restructuring. »

Mr. Bourque will provide an update on his recommendations to Superior Court Judge Michel A. Pinsonnault on Wednesday. The amount we want to collect is not specified, and we do not know what the face of Groupe Sélection, founded by Réal Bouclin – who was at the head of the company at the time of its debacle – will be at the end of the process. auction.

For the RPA giant, what happens next depends on its ability to find an ally to buy out its partners in certain projects. According to the controller’s report, Mr. Bouclin, supported by the Royal Bank of Canada, is making “fundraising efforts that could lead to financial restructuring”.

It was not possible on Tuesday to know how advanced these steps were.

“With our partners, we are fully committed to the recovery and maintenance of a family business, 100% Quebec and led by the Bouclin family,” Selection said in a statement sent by email.

expected sales

Behind the scenes, some files are progressing more than others. For example, Blackstone submitted a proposal last December to buy out the 5% stake held by Sélection in a portfolio of 11 RPAs held jointly with the American investment fund. The price of this possible transaction is unknown.

In addition, an agreement in principle was reached to allow the Fonds de solidarité FTQ to buy two buildings in Lachenaie in which Sélection has a 50% interest.

“Several transactions are under negotiation, and the monitor hopes to see them close in the short term,” the report said.

Revera, indirectly owned by the investment board of the federal civil servants’ pension fund PSP, has also submitted a proposal to buy Selection in 25 RPAs. This will serve as the starting bid for the auction. The Quebec company also received offers from the Fonds de solidarité FTQ and FTQ Immo for its stakes in Espace Montmorency, in Laval. It remains to be seen if a transaction will be finalized or if there will be an auction.

Money to recover

We also learn that PwC sent a formal notice to businessman Herbert Black asking him to reimburse $700,000 in fees obtained last November. At the time, Mr. Bouclin, who was trying to retain control of Selection, hoped to buy time thanks to interim financing of 50 million offered by the scrap metal magnate. The idea was to have time to maximize the sale of assets to repay creditors.

However, this proposal by Mr. Black was accompanied by several conditions and was not accepted by Judge Pinsonneault. Mr. Black was, however, able to pocket $700,000.

In addition, activities were disrupted in Sélection RPAs located in Rimouski, Deux-Montagnes, Brossard and in the Laval district of Sainte-Dorothée due to the cold snap that occurred earlier this month. . Pipe bursts and water damage have occurred.

“Nearly 86 residents were affected to varying degrees by this work,” the report said. Residents had to be temporarily rehoused in the building while the remediation and reconstruction work was carried out. »

As of February 11, there was approximately $8.8 million in Selection’s coffers. During the eight weeks preceding this date, cash outflows were slightly higher than receipts. The RPA giant generated 27.2 million while it had to pay out 27.3 million.

According to Mr. Bourque, the situation is “better than expected”. The latter does not expect to request an increase in interim financing from Selection’s lenders at this time.