Superior Court judge Marie-Anne Paquette ruled in favor of the BlackRock Metals Shareholders’ Group by extending the period for soliciting offers to buy back the company from 30 to 60 days.
Justice Paquette oversees BlackRock Metals ‘restructuring process under the Companies’ Creditors Arrangement Act (CCAA). Two days before Christmas, the mining company filed for protection under the Act because it did not have the money to pay off its major creditors.
Founded in 2008, BlackRock aims to produce iron, vanadium and titanium, essential minerals in the electrification of the economy and the reduction of greenhouse gas emissions. The deposit is located near Chibougamau and the metallurgical complex is to be built at the port of Saguenay. BlackRock needs US $ 1.1 billion to move forward with its ambitious project, according to Controller Deloitte.
“The Court holds that the request to extend the period from 30 to 60 days is not unreasonable and must be granted, to ensure that the market has benefited from a real opportunity to formulate offers competing with those of the Stalking horse bid [offre-paravent de départ], wrote Justice Paquette. In the circumstances, in order to set the appropriate deadlines, one cannot rely solely on the requirements of Orion and IQ. [Investissement Québec], who are admittedly the interim lender, but also the buyers under the Stalking horse bid. “
Under the CCAA, Investissement Québec and Orion propose to buy back 100% of the shares of BlackRock in exchange for the value of their guaranteed bridge loan of approximately 90 million.
For the Shareholders’ Group, the secured creditors, by acting in this way, use the CCAA in a roundabout way to appropriate the value of the company. He asks the Court to recognize him as an intervener. Shareholders risk losing their stake if IQ and Orion’s front bid is accepted as is.
The first hearing in this case took place on Friday, January 7. Justice Paquette essentially endorsed the process proposed by BlackRock, its directors, secured creditors and Controller Deloitte except for the deadline for receiving offers, which she extended from 30 to 60 days. The parties thus have until March 9 to present a competing offer to the screen offer from IQ and Orion.
The lawyer for the Shareholders’ Group is delighted with the court’s decision.
It shows that the judge understands the importance of being able to generate shareholder value. It is also a clue that the judge is not going to be bulldozed by the fact that everything is agreed in advance by the monitor and the secured creditors. She will do as she sees fit.
Me Doug Mitchell, lawyer at IMK, which represents the BlackRock Metals Shareholders’ Group
The judge thus recognized the BlackRock Shareholders’ Group as intervening in this case.
“The Court nevertheless considers that the Shareholders’ Group has the right to be heard in the context of these proceedings, insofar as its interventions relate to questions on which the Court is called upon to rule, at the against the terms, spirit and objectives of the CCAA, ”she wrote in her decision.
Judge Paquette, on the other hand, refused the shareholders’ request to question certain people like Amyot Choquette from IQ out of court. Regarding the request to hold a meeting of shareholders, she ruled that such a request is premature, but assured that the rights of shareholders will be reserved in this chapter.