Crystallex International Gets Creditor Protection Order
(RTTNews.com) - Crystallex International (KRY.TO) Friday said it obtained an order from the Ontario Superior Court of Justice (Commercial List) for protection under the Companies' Creditors Arrangement Act or CCAA. Ernst & Young Inc. was appointed monitor under the order.
Subject to the order, proceedings by creditors and others cannot be continued or commenced without the consent of the company and the monitor, or leave of the court.
As previously announced, management had been exploring financing alternatives for some time, including a $120 million private placement disclosed on October 11, 2011. The company had to deal with the liquidity crisis resulting from the $100 million senior unsecured notes issued by the company maturing today.
Although the company has received proposals, none had been satisfactory and discussions continue, Crystallex said.
The order obtained today permits Crystallex to remain in possession and control of its property, carry on its business and retain employees while it obtains additional time to pursue its arbitration with the Bolivarian Republic of Venezuela and complete financings in order to enable all its creditors to be paid in full.
The company currently has cash and cash equivalents and other assets that are expected to be sufficient to fund its obligations and budgeted expenditures until it obtains debtor-in-possession or DIP financing.
The company is currently pursuing DIP financing in amounts sufficient to continue to finance itself through the CCAA proceedings. Crystallex said it has received expressions of interest from several parties who are interested in providing the financing and intends to conclude negotiations for a financing facility within the next few weeks.
Toronto, Canada-headquartered Crystallex engages in the development of gold properties in Venezuela. It principally holds an international claim in relation to its investment in the Las Cristinas gold project located in Bolivar State, Venezuela.
KRY.TO last traded at C$0.0650, down C$0.0150 or 18.75%, on the Toronto Stock Exchange. Over the past year, the stock traded in a range of C$0.06 - C$0.32.
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