In just five days, C&C Wood Products Ltd. and Westside Logging Ltd. will have a new owner.
On Wednesday, July 29, B.C. Supreme Court approved the deal PricewaterhouseCoopers made earlier this month with a company named Quesnel Investment Corporation.
According to an update provided on PWC’s website, the court issued an order which approved PWC’s work as receiver of the bankrupt companies including; statement of receipts and disbursements, sale process of the Quesnel operations and assets and the non-licence asset purchase agreement and the licence asset purchase agreement.
The Court also granted an order which approved the sealing of the confidential supplement to the First Report.
The non-licence asset purchase agreement is expected to close within five business days and the forest and timber licences purchase agreement is expected to close by October 31, 2020.
On June 5, 2020, PWC was appointed receiver of all the assets, undertakings, and property of C&C Wood Products Ltd. and Westside Logging Ltd.
In a report summarizing the work of PWC and submitted to the court for approval, PWC was tasked with looking at all options to maximize recoveries including a potential sale of the business. The company shut down on May 29, 2020 and the PWC would not be resuming operations.
In the report, PWC noted the sale transaction of C&C Wood Products and Westside Logging Ltd. “may preserve jobs in Quesnel, thereby promoting the interests of the community.”
C&C was incorporated in the Province of British Columbia on April 12, 1977. Until Jan. 31, 2019, C&C was a subsidiary company of C&C Resources Inc., at which point it became a wholly owned subsidiary of Callidus, according to the PWC report. Westside Logging (WSL) was incorporated in the Province of British Columbia on Feb. 1, 2019 and is a wholly-owned subsidiary of C&C.
C&C has been in the primary business of manufacturing wood products such as wall paneling, shiplap, molding and dimensional lumber at its facilities. C&C has one facility in Quesnel, which had 114 employees and an annual mill capacity of approximately 220,000 m3 prior to layoffs occurring in March 2020. The Quesnel facility shut down at the end of May 2020.
C&C has a second facility in Cranbrook, which was the former Tembec finger-jointing facility that had been sitting idle for many years prior to C&C restarting it in 2019. The Cranbrook facility had 40 employees and a planned manufacturing capacity of more than 20 million foot board measures per year of engineered wood products. The Cranbrook facility was put on care and maintenance in January 2020.
WSL has been in the primary business of logging for C&C and third party companies in the Quesnel region, with 31 employees and an annual capacity to cut of approximately 68,000 m3 logs, states the PWC report. WSL operations shut-down at the end of May 2020.
According to the PWC report, C&C Wood Products and WSL sustained significant operating losses over the last two fiscal years. The companies’ operations were financed through additional capital provided by Callidus in the form of shareholder loans.
In June, 2020, PWC took steps to take possession and control over the property situated at the Quesnel facility and the Cranbrook facility. Due to the COVID-19 pandemic, PWC coordinated the taking of possession and control of the companies’ property by utilizing 18 former employees who worked as contractors for PWC supporting lumber sales, carrying out remediation obligations, maintaining and updating the companies’ records in respect of the property and assisting prospective purchasers in their due diligence efforts during the sale process. As of July 23, 14 contractors remain.
Prior to PWC’s appointment as receiver, C&C entered into a log purchase agreement with an existing customer to liquidate the remaining C&C mill yard log inventory. In its report, PWC noted the contract was concluded on July 10, 2020, with the value of mill yard log inventory sold totaling $831,000. On July 13, 2020 PWC determined no further finished lumber inventory would be dispatched from the mill and that the remaining finished lumber inventory would be included in the sale transaction.
PWC reports that Columbia Basin Trust has security over the Cranbrook facility and that C&C entered into a letter of intent with an interested party for the purchase of the assets there.
“The receiver continues to progress a transaction for the assets at the Cranbrook Facility, which requires the support of Columbia Basin Trust,” reports PWC.
It is not revealed in the court documents who owns Quesnel Investment Corporation.