Nautilus Minerals Inc

CCAA

Page last updated: September 11, 2019

This page is for information purposes only and you should consult your professional adviser if you have any questions or are uncertain as to your rights or obligations.


Status Update as of September 19, 2019 

The Monitor confirms the Court hearing scheduled for Friday, September 20, 2019 at 10:00 a.m. 

In addition to the application to determine the validity of the Eda Kopa Claim, on September 18, 2019 the Nautilus Group filed an application for the approval of the increase and extension of the Interim Lending Facility to $4.45 million and September 30, 2019 respectively. 

The Monitor has issued its Sixth Report to Court which can be found under the “Monitor’s Reports” tab above. The Company’s application materials are posted on this website under the “Motion Materials” tab above.

Status Update as of September 11, 2019 

On September 10, 2019, the Court heard the applications of Eda Kopa and the Nautilus Group. 

The Court directed that the validity of the Eda Kopa Claim be determined on September 20, 2019. 

A Sealing Order was also granted, permitting the filing of the Eda Kopa application materials under seal.

Status Update as of September 5, 2019 

On September 5, 2019 Eda Kopa and the Nautilus Group have individually filed applications for the September 10, 2019 Court hearing. We summarise the applications below: 

  • Eda Kopa is seeking to set a schedule to have the validity of their claim (the "Eda Kopa Claim") determined. 
  • The Nautilus Group is seeking to have the validity of the Eda Kopa Claim determined on September 10, 2019, or as soon as reasonably practical afterwards. 

The Monitor has issued its Fifth Report to Court which can be found under the “Monitor’s Reports” tab above. The report outlines the Monitor's support of an expedited hearing for the Eda Kopa Claim determination so that the restructuring is not jeopardized.

Status Update as of August 28, 2019

As outlined in the Monitor’s Fourth Report to Court dated August 9, 2019 (the “Monitor’s Fourth Report”), the Nautilus Group and Eda Kopa (Solwara) Limited (“Eda Kopa”) need to reach a resolution with respect to: (i) Eda Kopa’s claim in the CCAA proceeding and, (ii) more generally, Eda Kopa’s relationship with the Nautilus Group going forward. Both matters require resolution in order to satisfy the conditions precedent for implementation of the Plan.

Details of Eda Kopa’s claim in the CCAA proceeding are found in Paragraph 3.7 of the Monitor’s Fourth Report. In summary, Eda Kopa filed a proof of claim for USD$50.89 million. Eda Kopa’s claim was disallowed for the reasons outlined in Paragraph 3.7.1 of the Monitor’s Fourth Report. Eda Kopa filed the required notice of dispute but failed to provide any new evidence. With no new information, there was no basis to withdraw or amend the disallowance. On or about August 6, 2019, Eda Kopa retained legal counsel in Canada and requested an extension of the deadline to file its materials to appeal the disallowance with the Court. The Nautilus Group, with the consent of the Monitor, agreed to extend the deadline to August 19, 2019. Following a request for a further extension, the Nautilus Group, with the consent of the Monitor, agreed to further extend the deadline to August 29, 2019.

A Court date has been set for September 10, 2019 to hear Eda Kopa’s appeal of the disallowance of its claim. Therefore, a resolution to the matter is expected to be reached on or shortly after September 10, 2019.

Despite best efforts on the part of the Nautilus Group, a resolution between the Nautilus Group and Eda Kopa is not anticipated in time to satisfy the conditions precedent required to implement the Plan on or before August 30, 2019.

As a result, the August 30, 2019 deadline and the date for any distribution to Affected Creditors will be adjusted to accommodate the resolution of the Eda Kopa claim, with any distribution anticipated as soon as practicable following a favorable resolution to the matter (on or shortly after September 10, 2019).

As outlined in Paragraph 3.7.5 of the Monitor’s Fourth Report, if a resolution cannot be achieved, both with respect to: (i) Eda Kopa’s claim in the CCAA proceeding and, (ii) more generally, Eda Kopa’s relationship with the Nautilus Group going forward, the Plan will not be implemented resulting in no distribution to Affected Creditors as anticipated and the Nautilus Group’s restructuring will fail.

Further updates in relation to this matter will be provided on the Monitor’s Website.

Status Update as at August 13, 2019

At today’s Court hearing, the Court granted an Order sanctioning the Plan of Compromise, Arrangement, and Reorganization dated July 23, 2019 (the “Sanction Order”) that was approved by the Affected Creditors at the August 9, 2019 Meeting of Creditors. A copy of the Sanction Order can be found under the “Court Orders” tab above.

The Sanction Order:

  1. Approves the Plan,
  2. Authorizes the Nautilus Restructuring Entities to implement the Plan, and
  3. Authorizes PricewaterhouseCoopers Inc., in its capacity as Court-Appointed Monitor of the Petitioners, to facilitate completion of the transactions contemplated under the Plan.

Next steps require the conditions precedent under the Plan and Acquisition Agreement to be met or waived.

We will post another update on this website early next week with respect to the progress and timing of same.

Status Update as at August 12, 2019

The court hearing scheduled for Tuesday, August 13, 2019 at 10:00 a.m. has been changed to 9:00 a.m.

Status Update as at August 9, 2019

The Meeting of Affected Creditors (the “Meeting”) was held this morning at 10:00 a.m. to consider and vote on the Plan of Compromise, Arrangement, and Reorganization (the “Plan”).

In order for the Plan to achieve creditor approval, the vote required more that 50% in number representing more than 2/3 in value of creditors present and voting. The Affected Creditors voted in favour of the Plan. For full details of the Meeting and the voting results, please refer to the Monitor’s Forth Report to Court, which can be found under the “Monitor’s Reports” tab.

The Petitioners have scheduled a court hearing for Tuesday, August 13, 2019 at 10:00 a.m. to seek the Court’s sanction of the Plan.

Status Update as of July 26, 2019

General

On July 25, 2019, the Petitioners applied for and obtained an order (the “Meeting Order”) amending the style of cause of these CCAA proceedings to change the name of the Petitioner, Nautilus Minerals Singapore (Holdings) Pte. Ltd., to “Nautilus Minerals Singapore Pte. Ltd.”, and authorizing:

  1. Nautilus Minerals Inc. (the “Company”) to enter into an acquisition agreement (the “Acquisition Agreement”) with Deep Sea Mining Finance Ltd. (“DSMF”); and
  2. Certain of the Company’s subsidiaries (collectively, the “Nautilus Restructuring Entities”) to file a plan of compromise and arrangement (the “Plan”) among their unsecured creditors (the “Affected Creditors”) and to convene a meeting of such creditors for the purpose of voting on the Plan (the “Meeting”).

The Meeting

The Meeting will take place at 10:00 a.m. (Vancouver time) at the offices of the Monitor located at 250 Howe St, 14th Floor, Vancouver, British Columbia, Canada.

Pursuant to the Meeting Order, on or before July 29, 2019, the Monitor will send the following documents (collectively, the “Meeting Materials”) to the Affected Creditors:

  • the Meeting Order;
  • the Convenience Creditor Election;
  • the Monitor’s Third Report;
  • the Notice of Meeting;
  • the Affected Creditor Proxy; and
  • the Plan

The Meeting Materials will be sent to the Affected Creditors by email or ordinary mail (if no email has been provided) no later than Monday, July 29, 2019, and are also available under the "Meeting of Creditors" tab above. 

Only Affected Creditors with a Proven Claim (as defined under the Claims Process Order) that are not Convenience Creditors (as defined in the Plan) are entitled to vote on the Plan at the Meeting. Voting can be done by ballot in person at the Meeting, or by submitting an Affected Creditor Proxy to the Monitor in the manner provided under the Meeting Order. Proxies must be sent to the Monitor no later than 5:00 pm (Vancouver time) on Thursday, August 8, 2019, or be hand delivered at the Meeting.

Affected Creditors that submit Convenience Creditor Elections to the Monitor no later than 5:00 p.m. (Vancouver time) on August 8, 2019 in the manner provided under the Meeting Order, and any Affected Creditors with a Proven Claim in an amount that is less than or equal to $10,000 are “Convenience Creditors” under the Plan. Convenience Creditors will receive an amount that is the lesser of $10,000 and the full amount of their Proven Claim. Convenience Creditors are deemed to vote in favour of the Plan.

In the event that the Plan is approved by the requisite majorities of the Affected Creditors at the Meeting, the Petitioners will bring an application to the Court at 10:00 a.m. on August 13, 2019 for an order approving and sanctioning the Plan and various transactions related to the Plan and the Acquisition Agreement.

The Plan

The Plan is available under the "Meeting of Creditors" tab above.

The Plan, specifically Sections 3.5 and 4.1, contain information on how Affected Creditors’ claims are treated.  The Monitor's Third Report, available under the “Monitor’s Reports” tab above, discusses the following:

  • Summary of the Plan (Section 5)
  • Monitor's comments and recommendations on the Plan (Section 6)

The Monitor has recommended that the Affected Creditors vote to approve the Plan.

Status Update as at July 24, 2019  

Please be advised the Court hearing scheduled for July 26, 2019 at 10:00 AM has been changed to July 25, 2019 at 2:00 PM in Vancouver, BC.

Status Update as at July 23, 2019

The Company has filed an application today which shall be heard on Friday, July 26, 2019 to approve the filing of the Company’s Plan of Compromise, Arrangement and Reorganization, and to hold a Meeting of Creditors at 10:00 a.m. (Vancouver Time) on August 9, 2019 to vote on the Plan.

The Company’s application materials are posted on this website under the “Motion Materials” tab above. Also, the Monitor has issued its Third Report to Court which can be found under the “Monitor’s Reports” tab above.

Status Update as at June 17, 2019

General

On June 17, 2019, the Court granted two Orders, the first of which:

  1. Extended the Stay of Proceedings to August 30, 2019;
  2. Added certain subsidiaries of Nautilus Minerals Inc. as Petitioners in the CCAA Proceeding and amended the style of cause to include such parties as Petitioners;
  3. Approved the termination of the SISP; and
  4. Increased  both the authorized borrowing limit under the Interim Lending Facility from $4 million to $4.25 million as well as the amount of the Interim Lender’s Charge; and

The second Order (the “Claims Process Order”) authorized and directed the Petitioners and the Monitor to initiate a process for the solicitation and determination of claims against the Petitioner (the “Claims Process”).

Copies of the court orders are available under the “Court Orders” tab above.

Claims Process

As approved pursuant to the Claims Process Order, the Claims Process was initiated on June 7, 2019. Copies of the Claims Process documents are available under the “Claims Process” tab above.

If you have already filed your Proof of Claim form, there is no need to refile.

As a reminder, participation in the Claims Process is intended for:

  1. Any Person asserting a Claim (other than an Unaffected Claim as defined in the Claims Process Instruction Letter) of any kind or nature whatsoever against any of the members of the Nautilus Group, or any of the Directors or Officers of the companies comprising the Nautilus Group, which arose before the Filing Date, and
  2.  Any Person asserting a Restructuring Claim arising as a result of a disclaimer, resiliation, or termination, on or after the Filing Date, by any of the members of the Nautilus Group of any contract, agreement, or arrangement of any nature whatsoever.

Proofs of Claim must be completed and submitted to the Monitor by 5:00 pm Vancouver time on Friday, July 12, 2019 or, in the case of Restructuring Claims, the later of July 12, 2019 and 10 days after the date on which the creditor received a Notice of Disclaimer or Resiliation.  Subject to the terms of the Claims Process Order, if creditors do not submit their Claim by such deadlines, they may not be able to participate in any Restructuring Plan and their Claim may thereafter be barred and extinguished.

Notice to Shareholders

As referenced in the Monitor’s Second Report to Court, the Company is currently negotiating with its secured lender to develop a restructuring plan. It is, in the Monitor’s view, extremely unlikely that such plan will result in any recovery for shareholders in respect of their investment in the Company.

Shareholders are directed to the Monitor’s Second Report to Court dated June 12, 2019 and the Company’s June 17, 2019 news release available here for additional information regarding the foregoing.

Status Update as at June 17, 2019 

Please be advised the Court hearing scheduled for June 17, 2019 at 9:00 AM in Vancouver, BC has been changed to 1:00 PM. 

Status Update as at June 13, 2019 

General

The Company has filed applications today which shall be heard on Monday June 17, 2019 at the Supreme Court of British Columbia. The purpose of the hearing is to seek:

  1. An order extending the stay of proceedings to August 30, 2019;
  2. Approval of the termination of the SISP;
  3. Include the remaining entities of the Nautilus Group in these CCAA proceedings, with the exception of Nautilus Minerals Niugini Limited and Nautilus Minerals Italy S.r.l/F-Simbolica Srl (In Liquidation);
  4. Approval of the extension of the Interim Lending Facility to August 30, 2019 under the same terms and conditions;
  5. Amend the total commitment of the Interim Lending Facility from $4.0 million to $4.25 million and increase the amount of the Interim Lender’s Charge (as defined in the Initial Order) by a corresponding amount; and
  6. A Claims Process Order.

Application materials will be posted to this website in due course. The Monitor's Second Report to Court dated June 12, 2019 is posted under the "Monitor's Reports" tab.

Claims Process

As outlined in the June 10, 2019 Status Update, the Monitor on behalf of the Company distributed the following documents to all known creditors of the Nautilus Group:

  1. Claims Process Instruction Letter; and
  2. Proof of Claim form

These documents are available under the "Creditor Communications" documents tab above.

Participation in the Claims Process is intended for: (i) any Person asserting a Claim (other than an Unaffected Claim as described in the Claims Process Instruction Letter) of any kind or nature whatsoever against any of the members of the Nautilus Group, or any of the Directors or Officers, which arose before the Filing Date, and (ii) any Person asserting a Restructuring Claim arising as a result of a disclaimer, resiliation or termination, on or after the Filing Date, by any of the members of the Nautilus Group of any contract, agreement or arrangement of any nature whatsoever.

Proof of Claims must be completed and submitted to the Monitor by 5:00 pm Vancouver time on Friday, July 12, 2019 or, in the case of Restructuring Claims, the later of July 12, 2019 and 10 days after the date on which the creditor received a Notice of Disclaimer or Resiliation.  If creditors do not submit their Claim by such deadlines, they may not be able to participate in any Restructuring Plan.

A copy of the Claims Process Order, once granted, will be posted on the Monitor’s Website on or shortly after June 17, 2019 under the "Court Orders" tab above.

Status Update as at June 10, 2019

General

The Nautilus Group is developing a restructuring plan (the "Restructuring Plan") which will likely involve a number of transactions and, possibly, a proposal to one or more classes of creditors of various entities within the Nautilus Group.  The Restructuring Plan, once finalized, will be made public at a later date (likely in July, 2019). The Monitor is pleased that a clear way forward is being developed by the Company together with the Monitor in relation to the restructuring proceeding.    

On June 17, 2019, the Nautilus Group will be applying to the Supreme Court of British Columbia (the “Court”) for an order (the “Claims Process Order”) in the Company’s Companies’ Creditors Arrangement Act (the “CCAA”) proceedings authorising the Nautilus Group to initiate a process (the “Claims Process”) whereby creditors can prove their Claims against the members of the Nautilus Group and their directors and officers.

A copy of the Claims Process Order, once granted, will be posted on the Monitor’s Website on or shortly after June 17, 2019 under the "Court Orders" tab above.

The Claims Process Order being sought requires all creditors who wish to participate in any Restructuring Plan put forward by the Nautilus Group, to prove they were a creditor of the Nautilus Group or any of their directors or officers (a "Claim") as at February 21, 2019 (the "Filing Date").  As such, the Monitor on behalf of the Company has distributed following documents to all known creditors of the Nautilus Group:

1.   Claims Process Instruction Letter; and
2.   Proof of Claim form

These documents are available under the "Creditor Communications" documents tab above.

Participation in the Claims Process is intended for: (i) any Person asserting a Claim (other than an Unaffected Claim as described in the Claims Process Instruction Letter) of any kind or nature whatsoever against any of the members of the Nautilus Group, or any of the Directors or Officers, which arose before the Filing Date, and (ii) any Person asserting a Restructuring Claim arising as a result of a disclaimer, resiliation or termination, on or after the Filing Date, by any of the members of the Nautilus Group of any contract, agreement or arrangement of any nature whatsoever.

Proof of Claims must be completed and submitted to the Monitor by 5:00 pm Vancouver time on Friday, July 12, 2019 or, in the case of Restructuring Claims, the later of July 12, 2019 and 10 days after the date on which the creditor received a Notice of Disclaimer or Resiliation.
 If creditors do not submit their Claim by such deadlines, they will not be able to participate in any Restructuring Plan.  In addition, the Claim may be extinguished by the Court as part of the CCAA process.

SISP


The SISP Team has now terminated the solicitation process and the Monitor will provide details on the results in the next Monitor's Report to Court which will be available shortly.  An Addendum to the SISP is available on this website under the "SISP" tab above.

Status Update as at April 25, 2019

SISP

The Monitor has received formal requests for an extension of time from Potential Bidders in order to complete further due diligence and site visits in Australia. In order to coordinate same, the Monitor has extended the letter of intent (“LOI”) Deadline to May 21, 2019 at 5:00 p.m. Pacific Time (the "Modified LOI Deadline").  An Addendum to the SISP is available on this website clicking the "SISP" tab above. 

It is the Monitor's expectation that Potential Bidders submitting an LOI by the Modified LOI Deadline will have substantively completed a greater degree of due diligence and will be prepared to move forward with negotiating and finalizing a transaction or transactions by the previously anticipated Restructuring Deadline of 5:00 p.m. Pacific Time, June 21, 2019.

Status Update as at April 3, 2019

General

The CCAA Comeback Hearing was held on March 11, 2019 and at that time, the Sales and Investor Solicitation Process (‘SISP’) was confirmed and the stay of proceeding was extended to June 28, 2019.  We are preparing this brief update for stakeholders and other interested parties.

Operations

Since March 11th, the Company has finalized its interim financing agreement and funds are in place to pay amounts pursuant to the Initial Order as contemplated in the Company’s Cash Flow Statement. The Monitor continues to review the Company’s cash flows and to date, the actual activity has been as projected.  Accordingly, the Monitor confirms that operations are continuing as planned and there have been no unforeseen complications arising from the CCAA process.

SISP

The Monitor and the Company initiated the SISP, as approved by the Court in the Initial Order and the Monitor has been actively pursuing parties interested in the sale of all or any part of the Company’s Property, together with parties who are contemplating an investment in the Company, albeit in a restructured manner.

The Monitor is currently reviewing information provided by a number of parties following the March 29, 2019 pre-qualification deadline. The pre-qualification deadline was established to assess the interested party’s financial ability to complete a transaction that may be contemplated under the SISP.  At this stage in the SISP, the Monitor and the Company are pleased with the robust nature of interest from a wide range of parties.

The next milestone in the SISP is April 26, 2019. At this time, interested parties are required to submit letters of intent.

Corporate Governance

The Toronto Stock Exchange (the ‘TSX’) has delisted Nautilus Minerals Inc. effective today, April 3, 2019.   The delisting was not a surprise to the Company or the Monitor and does not represent a challenge to the plans envisioned in this restructuring.

The Company was given notice of the delisting decision by the TSX in mid-March and appealed this decision shortly thereafter.  Late last week, the Company received notice that this appeal was denied by the TSX. Accordingly, effective today, Nautilus Minerals Inc. is no longer listed on the TSX.

In light of the delisting and the changes to the regulatory requirements moving forward, the Company’s Board of Directors determined that its function of overseeing a publicly-listed company had changed significantly, particularly in light of the CCAA process, together with the added oversight of the Monitor in these proceedings.  As a result, there has been a change to the governance structure of the Company and certain of its subsidiaries. As of March 29, 2019, all directors of Nautilus Minerals Inc., with the exception of the Chairman, resigned. Mr. John McCoach also resigned as CEO of the Company.

The Company’s CFO, Mr. Glenn Withers, has been named as Managing Director over the Company operations and has been appointed to the Board of Nautilus Minerals Inc. and Nautilus PNG. As a result, the Company maintains a fully compliant board of directors and an experienced, but streamlined, management team and corporate governance board structure. In conjunction with the Monitor, management will retain full and exclusive oversight over the SISP process.

The Company and its subsidiaries will continue to operate as normal during the CCAA process.

Status Update as at March 12, 2019

On March 11, 2019 the Court approved the application to extend the stay of proceedings to June 28, 2019. A copy of this Order can be found under the Court Orders tab.

Status Update as at March 7, 2019 

The Comeback Hearing is set for Monday, March 11, 2019 at the Supreme Court of British Columbia. The purpose of the hearing is to extend the stay of proceedings to June 28, 2019. Application materials will be posted to this website in due course. The Monitor's First Report to Court dated March 7, 2019 is posted under the "Monitor's Reports" tab.

Status Update as at February 21, 2019

On February 21, 2019 (the "Filing Date"), Nautilus Minerals Inc. (“NMI”) and Nautilus Minerals Pacific Pty Ltd. (together with NMI, "Nautilus") sought and obtained an Initial Order of the Supreme Court of British Columbia (the “Court”) pursuant to the Companies’ Creditors Arrangement Act (the “CCAA”). Nautilus' intention is to continue its operations during these CCAA proceedings while it carries out a sale and investment solicitation plan ("SISP"). Please click on the "SISP" tab above for more information.

In order to continue to fund Nautilus' operations during its restructuring process, Nautilus negotiated a US$4 million Interim Loan Agreement with Deep Sea Mining Finance Ltd. The Court approved this Interim Loan Agreement.

As is typical of Initial Orders pursuant to the CCAA, there are, among other things, a stay of proceedings against Nautilus, and the Court extended the stay to NMI’s subsidiary, Nautilus Minerals Niugini Limited. The Initial Order also imposes restrictions on Nautilus' trading partners from terminating their arrangements with Nautilus and on payments that Nautilus can make with respect to obligations owing to Nautilus' creditors as at the Filing Date. As a result of the financing made available under the Interim Loan Agreement, Nautilus will continue to meet its payment obligations for goods and services provided following the Filing Date.

Details regarding Nautilus' background and financial position are contained in the application materials filed in support of Nautilus’ application for the Initial Order, which are posted on this website along with the Initial Order.

The Monitor prepared a pre-filing report to assist the Court during the application made by Nautilus. This report is posted on this website.

The Monitor will post regular status updates to this website and post future Monitor reports, Sale and Investment Solicitation Plan documents, and court materials, as they become available during the CCAA proceedings.

 

Contact us

Octavia Petre-Aldea

Senior Associate, PwC Canada

Tel: +1 604 806 7780 ext 4318

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