Selection had an agreement with the Caisse de dépôt

My many sources close to the file confirm it to me: the Caisse de dépôt has seriously discussed with the Selection Group, in recent months, to finance projects of the company in difficulty. And among the speakers was the Minister of the Economy, Pierre Fitzgibbon.

Negotiations took place during the summer and ended with a letter of intent signed on October 14 by Ivanhoé Cambridge, the Caisse’s real estate subsidiary, and Réal Bouclin’s company.

According to four sources familiar with the agreement, the Caisse had accepted the possibility of a partnership with Selection for future multi-residential projects of the company. It would have provided 85% of the financing in the form of loans, and the company of Réal Bouclin, 15%.

The letter was still not very binding for the Caisse, however, and did not target Selection’s past problems, for example the reimbursement of the banking syndicate, to which Réal Bouclin’s group owes 272 million.

The document was filed Wednesday during court hearings, but the Caisse de depot was not identified because it was placed in a confidential envelope.

The agreement became null and void, it should be noted, as soon as Sélection secured its protection from bankruptcy on Monday, November 14, by resorting to the Companies Creditors Arrangement Act (CCAA).

Fitzgibbon Talks

According to my information, during the summer, the Super Minister of the Economy, Pierre Fitzgibbon, discussed with the CEO of the Caisse, Charles Émond, the advisability of an intervention in the file of Selection. The strong man of the CAQ also had some interviews with Réal Bouclin.

In the minister’s office, we confirm that Pierre Fitzgibbon had discussions with Charles Émond, on the one hand, and Réal Bouclin, on the other hand, but we deny having put pressure on the Caisse de depot in any way.

According to Mr. St-Amant, “the minister wanted to know the Caisse’s intentions on the file” given that the government, through Investissement Québec, had a claim at stake of up to $60 million.

But is it the Caisse’s role to intervene in this type of case? “The Caisse’s dual mandate includes that of contributing to the economic development of Québec. It is up to them to interpret this mandate and to develop financial interventions that allow them to carry out this mandate,” wrote Mr. St-Amant.

At the Caisse de dépôt, spokesperson Maxime Chagnon confirms that a letter of agreement has been signed with Sélection, but denies that Pierre Fitzgibbon asked the Caisse to intervene.

” Nope. In all circumstances, the Caisse makes its decisions independently and according to its own criteria. And the government understands that,” he said.

According to the spokesperson for the Caisse, the agreement with Sélection was “a preliminary, non-binding framework letter, which demonstrates our interest in certain future projects in multi-residential projects”.

The two parties were beginning the due diligence process, which would have taken a few weeks, when Sélection protected itself from bankruptcy, explained Mr. Chagnon.

And moreover, according to my information, such an agreement would not have enabled Sélection, in the coming months, to stop the cash leaks of 7 million per month from the company, given the long delays before a project is bearing fruit.

The presence of the institution could nevertheless have reassured the banks and Selection’s partners.

According to my information, as part of the partnership with the Caisse, Sélection would have provided some of the land it had in the bank and whose preliminary stages of development were advanced (market studies, concept, site plan, etc. ), while Ivanhoé-Cambridge would have financed most of the construction.

During the hearings on Wednesday, the lawyer for Groupe Sélection, Guy Martel, filed the agreement in the court file under confidential cover, which did not prevent him from asking questions about it without mentioning the parties.

He asked the bankers’ accountant, Christian Bourque, if he had read this agreement and if it would not have been wise to include it in his report.

“I’ve seen a copy before, but it wasn’t signed. I had been aware of the discussions, but no signed agreement, replied Mr. Bourque. If this agreement materializes and this allows the relaunch of construction activities with a partner, it will be considered [dans une restructuration contrôlée par le mandataire du syndicat bancaire]. »

Thursday, Christian Bourque’s lawyer, Luc Morin, returned to this agreement. “This letter does not constitute a legally binding commitment […] And no one from this institution is present at the hearings [virtuelles] “, he said.

Luc Morin, who defends the creditors, added that Réal Bouclin did not see fit to mention this letter of October 14 when he met Christian Bourque and the bankers’ lawyers on Tuesday, November 8.

Nor did the Groupe Sélection camp see fit to put the letter on file with the Court at the time of the CCAA appeal on Monday, November 14, he said.

At the Caisse de dépôt, Maxime Chagnon affirms that for the partnership, “nothing is excluded for the future, depending on what will happen with the restructuring”.

With the collaboration of André Dubuc, La Presse