Newspaper article The Canadian Press

Quebec's Investment Arm Owed More Than $26 Million by Insolvent Timminco: Quebec Owed Millions by Timminco

Newspaper article The Canadian Press

Quebec's Investment Arm Owed More Than $26 Million by Insolvent Timminco: Quebec Owed Millions by Timminco

Article excerpt

TORONTO - The Quebec government's investment agency is owed more than $26 million by Timminco Ltd. (TSX:TIM), a specialty metals producer that filed for court protection this week.

In total, the Toronto-based silicon metals company owes $89 million to its various creditors and has run out of sources of funding to keep its operations running, according to court documents made public Wednesday.

The company owed $21.9 million in employee benefits, including $4.3 million for termination to former employees and certain former officers. It also owes various amounts to pension plans for its Ontario and Quebec employees.

The documents reveal that Investissement Quebec provided a $25-million loan to Timminco in July 2009 and agreed the following March to add $1.4 million of interest owing to the principal.

The loan, which currently racks up interest at a rate of 12 per cent per year, is guaranteed by Timminco and secured by all of the assets of its Becancour Silicon Inc. including its ownership share of Quebec Silicon Limited Partnership.

Timminco was a stock-market darling several years ago, based on a proprietary process for making solar grade silicon.

Demand for the material virtually dried up several years ago in the wake of the 2008 credit crisis but even before that there were persistent questions about the true value of the process.

Besides solar grade silicon, used for turning the sun's energy into electricity, Timminco produces silicon metal through the Quebec Silicon joint venture, which is 51 per cent owned by Dow Corning and 49 per cent by Timminco unit Becancour Silicon.

Quebec Silicon Limited Partnership itself isn't part of the CCAA filing.

The Ontario Superior Court of Justice has granted the company protection from its creditors until Feb. 2, to give Timminco time to come up with a survival plan satisfactory to its creditors.

By the end of January, a seasonally slow month for the company, Timminco will be down to about $500,000 of cash, according to a cash-flow forecast included with the company's court filing.

The company noted that Investissement Quebec has been helpful in the past but hasn't stepped forward to deal with the current cash crunch. …

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