Financial recovery | Tension in the air between Selection and its bankers

Selection Group and its head of restructuring are still poles apart on how to redress the insolvent real estate developer and operator of seniors’ residences (RPA). The disagreement this time concerns the huge Espace Montmorency project.

Comptroller Christian Bourque of PwC will appear this Friday before Quebec Superior Court Judge Michel Pinsonnault, who is overseeing the proceedings taking place under the Companies Creditors Arrangement Act (CCAA). He intends to ask for the green light from the magistrate to conclude a transaction that will allow the Solidarity Fund QFL to buy out Sélection’s stake in the multi-use complex located in Laval.

In his most recent report, the representative of the bankers considers that the real estate subsidiary of the labour-sponsored fund is the “natural buyer” for Selection. The company sees things differently.

There is no point in moving so quickly, says the RPA giant, since new interim funding guarantees the continuation of its activities at least until mid-June. The company finds it hard to understand why PwC is opting for an over-the-counter agreement in the case of Espace Montmorency, when the objective is to obtain the best possible price for its participation in the project.

“Unfortunately, this is not the case with the transaction, underlines Selection, in a statement sent to The Press. For the rest, we reserve our comments for the hearing scheduled for Friday. »

A major asset

Espace Montmorency is a multi-use complex worth 450 million including a hotel, shops, residential towers and underground parking. Its partners were the Fonds de solidarité FTQ, Montoni, Montez and Sélection, at a quarter each. The price of the transaction, which took place on April 18 after an improvement in the buyer’s offer, is not disclosed in Mr. Bourque’s report. The hotel component of the project is not included in the agreement.

“The transaction will generate cash to repay a portion of the interim financing and ensure the continuation of Selection’s activities,” writes the controller, about the agreement reached with the Solidarity Fund QFL.

The latter does not mention the state of relations between the creditors of Sélection and Réal Bouclin, the president of the company. The climate had worsened in recent weeks, to the point of prompting Judge Pinsonnault to recommend that both parties put water in their wine to clean up the climate.

In a decision rendered on April 12, the magistrate had also skinned the businessman, accusing him of a lack of “good faith” in the context of the ongoing restructuring.

Lots of invitations

We also learn from the controller’s report that it cast a wide net during the auction process targeting other Selection assets. Nearly 540 invitations were sent to Canada, the United States and elsewhere in the world with the aim of attracting potential buyers.

Since then, 46 “potential buyers have qualified,” the document reads.

“The PwC team and the controller have had many discussions with potential bidders to present the opportunity and respond to questions and requests for information,” writes Mr. Bourque, without offering more details.

What is offered at auction is grouped into two portfolios. The first concerns the 25 RPAs held with Revera and the other concerns assets – such as the District des Brasseurs project (ex-Molson brewery) which have not yet been the subject of over-the-counter agreements to be sold.

Mr. Bourque does not offer details about which assets are attracting the most interest. Four potential buyers have the complexes held with Revera – which has already submitted a seed bid – in their sights, while the other 41 are interested in the rest of Selection’s stakes in projects.