NTCL may file for bankruptcy in January
Company says 'a number of environmental issues' need to be managed first
With its major assets now going to the N.W.T. government, Northern Transportation Company Ltd. says it will likely file for bankruptcy in January.
On Monday, the Court of Queen's Bench of Alberta officially ended NTCL's bankruptcy protection process, which typically paves the way for a company's bankruptcy or dissolution.
But in an affidavit filed in court last week, Kyle Barsi, NTCL's vice president of finance, offered the first indication that NTCL would not simply dissolve but would pursue bankruptcy.
"A number of environmental issues need to be managed before that filing," he added.
- N.W.T. bought NTCL assets to preserve 'a lifeline' to remote communities
- $140M debt, which NTCL can't repay, could spread to Canadian North
'Environmental issues' keep getting cited
That's not the only mention of such issues in his affidavit.
The trio of banks to whom NTCL owes a combined $140 million are not willing to appoint a private receiver (whose job would be to wring out any remaining value from the company).
Why? According to Barsi: "Because of environmental issues."
Just what issues await the N.W.T. government at portions of the Hay River shipyard, which were part of the government's purchase from NTCL, remains an open question.
"At this point we don't know what those liabilities are, the full scope of them. We know they exist," says Kieron Testart, the MLA for Yellowknife's Kam Lake area.
"A company that's been around for 70 years and that existed predating many of the modern environmental regulations we have, is of course going to have an impact."
In September, NTCL ordered staff in Hay River to move "all and any environmental issue" off two shipyard lots the company was trying to sell to an area that was not for sale.
Last week, the territorial government said it would conduct site assessments of land that "may have environmental liabilities," an assessment Testart welcomes, if with some trepidation.
"There could be a price tag attached to those liabilities," he said.
NTCL had concerns about government purchase
NTCL did not support the territorial government's competing bid against Edmonton-based Flight Fuels for the rest of NTCL's viable assets, Barsi's affidavit now reveals.
While acknowledging the government's bid was higher, Barsi worried the bid might scupper a separate deal NTCL was trying to make to pay off debts to the Canadian Imperial Bank of Commerce and the N.W.T. Business Development and Investment Corporation. The latter is a Crown corporation of the territorial government and is owed around $1.8 million.
As of late last week, NTCL was closing a $5.4-million sale of its subsidiary, Beaufort Delta Petroleum, to Flight Fuels. BDP stores and distributes the fuel delivered to communities via sealift.
NTCL worried last week that if its assets went to the government, its transaction with BDP would "likely" not close.
The status of that deal was not clear as of Tuesday.
In an affidavit filed in response to one filed last week by the territorial government, Craig Symons, a director of Flight Fuels, shot back at claims by the government that his company, in going after NTCL's assets, was not interested in shipping dry goods to communities down the Mackenzie River and along the Arctic coast.
Symons wrote that had Flight Fuels secured NTCL's assets, its intention was "to operate those aspects of the business of NTCL concerning deck cargo and fuel."
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