Birch Mountain Resources ( BMD: TSX) announced late Monday (November 3, 2008) evening that it had received a demand for repayment of its loans from its principal secured creditor, Tricap Partners, together with a notice of intention to enforce security pursuant to section 244 of the Bankruptcy and Insolvency Act.
In a news release dated October 3, 2008 Birch Mountain reported that it had been unable to conclude a sale agreement or an equity financing in excess of $10 million to help pay for a $31.5 million principal amount convertible senior secured debenture, issued to Tricap Partners Ltd. on a private placement basis on December 21, 2007. Pursuant to this, the company and its financial advisor, RBC Capital Markets, were working with its stakeholders to recapitalize the balance sheet to improve liquidity and continue implementing the business plan.
However, since Birch Mountain has been unable to repay its indebtedness to Tricap at this time, it’s expected that Tricap will begin enforcement proceedings as early as this week. Birch Mountain said that “At this time there appears to be little likelihood that there will be any recovery by the shareholders in the event of a liquidation or sale of the Corporation's assets.”
Birch Mountain is developing the industrial mineral potential of their extensive mineral properties in the oil sands region north of Fort McMurray, in north-eastern Alberta. The company was marketing Limestone from the Muskeg Valley Quarry as construction aggregates and as rock for making concrete and asphalt. Reagent grade limestone can be used directly in applications such as flue gas desulphurization. With its Hammerstone Project Birch Mountain was intending to process the limestone as quicklime for flue gas desulphurization, water treatment, pulp and paper manufacturing, and soil and biosolids stabilization.
Source: http://www.newswire.ca/en/releases/archive/November2008/03/c4604.html
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