Nautilus gets protection order against creditors

Financial upheavals of the slated operator of the Solwara 1 project, Nautilus Minerals, will be further delayed as the company has obtained an order from the Supreme Court of British Columbia providing the company protection from its creditors.
Nautilus filed for relief under the Companies’ Creditors Arrangement Act (CCAA) according to its latest Toronto Stock Exchange report released on February 22.
The order under the CCAA will enable Nautilus to restructure its business and financial affairs.
The CCAA is a statute of the Parliament of Canada that allows insolvent corporations owing their creditors in excess of $5 million and above to restructure their business and financial affairs.
Shortly before the company’s application for protection under the CCAA, the company received a loan from Deep Sea Mining Finance Ltd in the principal amount of US$750,000 under the previously announced loan agreement, as amended, between the company, two of its subsidiaries and the lender which provides for a secured structured credit facility of up to US$34 million.
The initial order also authorised the company and two of its subsidiaries to enter into a new interim loan agreement with the lender, pursuant to which the lender has agreed to advance to the company up to $4 million to fund the company’s ongoing operations and restructuring.
The company is evaluating a range of alternatives to recapitalise Nautilus so that the reality of its seafloor mining projects can be achieved. The options could include the sale of Nautilus’ polymetallic nodule business unit and its seafloor massive sulfide business unit.
It maintained it is not bankrupt and remains in possession and control of its business, while continuing to receive support in the form of loans from the lender.
PricewaterhouseCoopers Inc has been appointed monitor under the initial CCAA Order.
In connection with the most recent US$750,000 portion of the Existing Loan Agreement, the lender waived the requirement for the company to issue share purchase warrants to the lender as contemplated by the existing loan agreement.
To date, the company has received loans from the lender totaling US$18,250,000. The loans bear interest at 8 per cent per annum, payable bi-annually in arrears. All loans have a maturity date of March 8, 2019.
The company continues to seek short and long-term funding solutions while assessing its options, including various restructuring options.
Negotiations with various third parties continue. There can be no assurances that the company will be able to successfully negotiate and complete any funding or other transactions. Any transactions will be subject to all necessary stock exchange, third party and government approvals, as well as compliance with all other regulatory requirements.
When recently queried on the future prospects of the Solwara 1 project, by the Post-Courier, the company replied that it is still in the process of securing additional funding as indicated above that will bring the Solwara 1 project to completion.
“Once we have this funding secured we will be in a better position to give you an update,” it said.

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