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HomeBusiness“Unicorn” Nexii under court protection from creditors

“Unicorn” Nexii under court protection from creditors

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Bob Mackin

The Vancouver green building products startup that called itself the fastest in Canada to reach $1 billion valuation is under court-ordered protection from creditors. 

B.C. Supreme Court Justice Michael Stephens appointed KSV Restructuring on Jan. 11 to monitor Nexii Building Solutions Inc. (NBSI), which owes creditors more than $112 million. Stephens’ order under the Companies’ Creditors Arrangement Act bought time for NBSI to seek interim financing of up to USD$750,000 and granted a stay of proceedings against the company until at least Jan. 22, when the next hearing is scheduled, to protect NBSI and related companies and their directors and officers from legal action.

Nexii Building Products’ Squamish plant (Nexii/X)

NBSI’s Jan. 10 petition to the court said it owes senior secured lenders Powerscourt Investments XXV LP, Trinity Capital Inc. and  Horizon Technology Finance Corp USD$79 million and equipment lessors, trade creditors and landlords $6 million. Assets include equipment, accounts receivable, contracts and intellectual property worth a total book value of $69 million.

NBSI, according to the petition, requested the stay of proceedings to “implement a sales process that the petitioners believe will enable them to restructure and implement a transaction that will benefit their creditors and stakeholders, and in particular will provide greater benefit than a forced liquidation or a bankruptcy.”

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.

As of Dec. 20, 2023, 142 people were employed by NBSI: 75 in Squamish, 62 in Vancouver and five in the U.S. NBSI owns various companies under the Omicron Canada Inc. umbrella who employ 160.

The affidavit from acting CEO William Tucker said several senior executives departed between August and December, including CEO Stephen Sidwell, manufacturing executive vice-president Brian Carter, investor relations vice-president Todd Buchanan and finance vice-president Bonnie Dawe. 

Tucker’s affidavit said he and Chicago-based senior executive advisor David Bryant are the current members of senior management. The Nexii website still shows Vancouver mayor Gregor Robertson as the executive vice-president of strategy and partnerships.

“Nexii requires additional funding to pursue its growth and business strategy. Historically, Nexii had funded growth through equity, and some debt financing,” said Tucker’s sworn statement. “Currently, Nexii 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 Nexii’s business.”

Tucker is also the CEO of Omicron Canada Inc., the residential designer and builder NBSI acquired in 2021. Nexii owes Omicron — which Tucker called “self-funding and profitable” — $4 million.

According to Tucker’s affidavit, NBSI raised $125 million since 2019, but costs have been high relative to revenue. It expected $14 million total revenue for 2023, a $7.1 million increase year-over-year. It has four ongoing construction projects nearing completion, expected to bring in $8.3 million, and six under contract where work has yet to begin.

The Omicron companies have 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.”

In September 2021, Nexii issued a news release that said it had reached “unicorn” status in less than 31 months. The same announcement heralded Procter and Gamble CEO David Taylor’s appointment to the board and promoted support from actor Michael Keaton and Super Bowl XLVII MVP Joe Flacco for expansion in Pennsylvania.

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