Bob Mackin
A B.C. Supreme Court judge approved the $3 million sale of Nexii Building Supplies Inc. (NBSI) subsidiaries and gave the troubled company more time to sell more assets.
Nexii Building Products’ Squamish plant (Nexii/X)
Justice Michael Stephens issued an order on April 26 to sell five related companies, Omicron Canada Inc., Omicron Construction Management Ltd., Omicron Consulting Ltd., Omicron Interiors Ltd., and Omicron Construction Ltd., to six numbered companies.
He set a June 28 deadline to close the deal and for NBSI to negotiate and finalize a transaction for the rest of its assets. NBSI claimed in 2021 that it was worth $1 billion.
In January, Stephens extended the stay of proceedings against NBSI under the Companies’ Creditors Arrangement Act until April 30, so that it could find a buyer.
In a report to the court, KSV said that, despite extensive marketing efforts, it did not receive a qualified bid in a form suitable for court approval.
“Following a period of negotiations, the Petitioners, in consultation with the Monitor and Interim Lenders, determined that the Purchasers’ bid was the Successful Bid under the Sale Process for the Property of the Vendors.”
KSV’s second report to the court said senior secured lenders, “the parties with the sole economic interest left in the Vendors and who are likely to suffer a material shortfall on their secured claims, have been consulted during the negotiations and are supportive of the Transaction.”
Secured lenders include Powerscourt Investments XXV LP, Trinity Capital Inc. and Horizon Technology Finance Corporation.
The companies seeking to buy Omicron are directed by a group that includes William Tucker, the CEO of both NBSI and Omicron, and senior-vice president George Sawatzky.
Stephens appointed KSV as monitor on Jan. 11 for NBSI, which owes creditors more than $112 million. NBSI’s Jan. 10 petition to the court said it owes the three senior secured lenders USD$79 million and another $6 million to equipment lessors, trade creditors and landlords. Assets include equipment, accounts receivable, contracts and intellectual property worth a total book value of $69 million.
NBSI markets the proprietary Nexiite panelling system, a low-carbon concrete alternative produced at its factory in Squamish for customers like Wal-Mart Stores Inc., JPMorgan Chase & Co., Starbucks Coffee Company and AECOM. In September 2021, NBSI declared itself the fastest to reach “unicorn” status in Canada, meaning $1 billion valuation.
As of Dec. 20, NBSI employed 142 people and its Omicron subsidiaries 160.
The court filing included a list of Omicron’s 87 design contracts and purchase orders, including clients ranging from Telus, Home Depot Canada Inc., Coca-Cola Bottling Ltd. and Lululemon Athletica to Port of Vancouver, ICBC, City of Vancouver and Liquor Distribution Branch.
Tucker’s affidavit from January said that NBSI historically had funded growth through equity and some debt financing.
“Currently, NBSI is not able to raise additional capital through equity and the senior secured lenders are not prepared to advance additional funds without a clear path to the sale of NBSI’s business,” Tucker swore.
NBSI acquired Omicron in 2021 and owes Omicron $4 million. NBSI, according to Tucker, raised $125 million since 2019 and expected $14 million total revenue for 2023. It had four projects nearing completion and expected to bring $8.3 million revenue. Omicron, meanwhile, had 67 contracts in progress worth $150 million before costs and another $110 million worth of contracts.
Last August, according to Tucker, Investcorp Green Limited invested $5 million in NBSI and, by November, the company had an $18-million term sheet for an investment from unnamed “strategic investors in the Middle East.”
“Unfortunately, shortly before closing, one of the investors terminated its involvement and the investment did not proceed,” said Tucker’s filing. “Losing access to these funds significantly limited the petitioners’ options.”
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