PENTICTON, B.C. – Stucturlam Mass Timber Corporation is selling off its assets in a $60 million stalking horse asset purchase agreement.
A stalking horse agreement is an initial bid on the assets of a bankrupt company where the company chooses from a pool of bidders to make a first bid on the firm’s assets. In Structurlam’s case Mercer International Inc. will buy the company’s assets in British Columbia and Arkansas.
Structurlam has also voluntarily filed petition under Chapter 11 of the U.S. Bankruptcy Code and will seek recognition of Chapter 11 proceedings in the Supreme Court of British Columba shortly thereafter, a company release stated.
“I am delighted and grateful for Mercer’s vote of confidence in Structurlam and in its leadership in the mass timber industry. It is especially rewarding given the difficult period the company has had since suspending its operations in Arkansas mid-January, and it will help in normalizing the plant operations going forward” Structurlam Mass Timber Corporation CEO Matthew Karmel said.
The asset purchase agreement is subject to higher and better offers as part of a court monitored auction process. In addition, the Company secured a C$7.5 million debtor-in-possession facility from the Bank of Montreal to fund its operations throughout the court process, the release added.
In Jan. 2023 Sturcturlam suspended its operations and reduced staff at its Conway, Arkansas plant due to a customer contract cancellation.
Structurlam is being advised by Stifel / Miller Buckfire as its investment banker.