25 June 2008

NLRC gets 30 days to sort out financials

NLRC has 30 days to sort out its financial affairs, a Supreme Court judge decided yesterday in St. John's.

NLRC sought court protection from its creditors last week, after SNC Lavalin sought payment of over $20 million it claims it's owed by the company proposing a second refinery for the Come by Chance area. SNC Lavalin subsidiary BAE NewPlan told the court payment on the company's design and engineering work stopped six months ago.

SNC Lavalin agreed to the reprieve but offered no public comment on its reasons.

Notice in the scrum [ram audio file] that managing director Brian Dalton uses  a couple of meaningless phrases to skip over the issue of the provincial government's role in funding his project.  No reporters probed the issue further.

There's also an interesting version of the recent corporate history. According to Dalton, the US market "closed very suddenly" earlier this year and as a consequence NLRC shifted direction elsewhere for investors. 

SNC Lavalin is a major contractor on the Lower Churchill development project.  Altius' proposal for an equity stake in the Lower Churchill project is reportedly still active.

The NLRC financial problems have had a dramatic impact on Altius, which owns almost 40% of the refinery venture.  Its stock plummeted last week on news of the bankruptcy proceedings but rebounded slightly with word of the stay. The NLRC - Altius connection figured prominently in many of the news stories running on the Tuesday court decision.