LAVAL, Québec, March 06, 2019 (GLOBE NEWSWIRE) -- Orbite Technologies Inc. (NEX: ORT.H) (“Orbite” or the “Company”) today provided an update on its progress in implementing the solutions to resolve the issues encountered with the calcination equipment at its HPA Plant, as part of its plan to emerge from CCAA protection.
Definitions of the capitalized terms used herein can be found at the end of this press release.
CCAA Court extends the Stay Period and approves interim financings
As announced on January 30, 2019, the CCAA Court issued an order pursuant to the CCAA extending the Stay Period until March 8, 2019. On March 6, 2019 the CCAA Court granted a motion filed by the Company and issued a fifth amended and restated initial order providing namely for the following orders:
- extending the Stay Period until June 7, 2019;
- approving an Amended Second DIP Financing which increases the loan made in June 2018 by $650,000, for a total amount of $8.1 million extended to date, and a related DIP super-priority charge over the Company’s assets. The loan will serve for working capital and other general corporate purposes. The terms and conditions of the Amended Second DIP Financing are substantially the same as for the Initial DIP Financing.
- approving a $2 million DIP financing and a related DIP charge over the Company’s assets. The loan will be disbursed in two equal installments and will serve to finance the required modifications at the HPA Plant which are under way.
The terms and conditions of the DIP Loan and of the Amended Second DIP Financing are disclosed in more detail in the Monitor’s report filed with the Company’s motion and will be filed in due course on SEDAR. - amending the terms of the Key Employees Retention Program initially disclosed on May 24, 2017 to increase the number of eligible key employees and the amounts they are entitled to. The amount of the charge over the Company’s assets remains however unchanged.
According to the Company’s cashflow projections filed with the CCAA Court, the $2,650,000 to be received as per the above should allow the Company to maintain its operations until the week of June 11, 2019.
Update on Outotec Calcination Equipment
As was announced on January 30, 2019:
- The Company started up the hydrometallurgical section of the HPA Plant in February 2019 and will soon re-commence the production of ACH crystals required to feed the pyro metallurgical section (decomposition and calcination) which is still expected to be started up at the beginning of the second quarter of 2019.
- After the start-up the HPA Plant and the production of a limited quantity of HPA to demonstrate the Plant’s capacity, it is then expected that the production activities will be put on hold while Orbite completes the required steps to emerge from CCAA protection.
- The required modifications, to both the calcination equipment and upstream sections of the plant, are being carried out by both Orbite personnel and outside contractors and are progressing as per project plan and within budget.
The Company will provide further updates as developments occur.
There can be no guarantees that the Company will otherwise be successful in its restructuring efforts and will emerge from CCAA protection.
Definitions
Amended Second DIP Financing: $1.3 million DIP financing from the DIP Lender and a related DIP super-priority charge over the Company’s assets. An initial portion of $650,000 was extended to the Company in June 2018.
CCAA: Companies’ Creditors Arrangement Act.
CCAA Court: Quebec Superior Court.
DIP Lender: Computershare Trust Company of Canada in its capacity as trustee for the holders of Orbite’s 7% Convertible Secured Debentures due September 28, 2018.
Initial DIP Financing: the $6.8 million debtor-in-possession (“DIP”) financing from the DIP Lender and a related DIP super-priority charge over the Company’s assets.
HPA Plant: the Company’s high purity alumina (HPA) plant, in Cap-Chat, Québec.
ACH: aluminum chloride hexahydrate, the precursor to high purity alumina.
Stay Period: Period of time during which there is a stay of all proceedings against the Company.
About Orbite
Orbite Technologies Inc. is a Canadian cleantech company whose innovative and proprietary processes are expected to produce alumina and other high-value products, such as rare earth and rare metal oxides, at one of the lowest costs in the industry, and in a sustainable fashion, using feedstocks that include aluminous clay, kaolin, nepheline, bauxite, red mud, fly ash as well as serpentine residues from chrysotile processing sites. Orbite is currently in the process of finalizing its first commercial high-purity alumina (HPA) production plant in Cap-Chat, Québec and has completed the basic engineering for a proposed smelter-grade alumina (SGA) production plant, which would use clay mined from its Grande-Vallée deposit. The Company's portfolio contains 15 intellectual property families, including 45 patents and 20 pending patent applications in 11 different countries and regions. The Company also operates a state of the art technology development center in Laval, Québec, where its technologies are developed and validated.
Forward-looking statements
Certain information contained in this document may include "forward-looking information". Without limiting the foregoing, the information and any forward-looking information include statements regarding projects, costs, objectives and future returns of the Company or hypotheses underlying these items. In this document, words such as "may",” confident”, "would", "could", "will", "likely", "believe", "expect", "anticipate", "intend", "plan", "estimate" and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. Forward-looking statements and information are based on information available at the time and/or the Company management's good-faith beliefs with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Company's control. Risks, uncertainties and other factors that could affect anticipated results and future events also include, but are not limited to, those described in the section of the Management's Discussion and Analysis (MD&A) entitled "Risk and Uncertainties" as filed on July 28, 2017 on SEDAR, including those under the headings “Going Concerns”, Commercial Operation of HPA Plant”, “We will need to raise capital to continue our growth” and “Development Goals and Time Frames” described in the MD&A filed on March 31, 2017.
The Company does not intend, nor does it undertake, any obligation to update or revise any forward-looking information or statements contained in this document to reflect subsequent information, events or circumstances or otherwise, except as required by applicable laws.
CONTACT INFORMATION:
Orbite Technologies Inc.
Geneviève Marchand, Corporate Secretary
Tel.: 450 680-3341
Email: info@orbitetech.com