February 10, 2016
GuestLogix files for CCAA protection
TORONTO, ONTARIO -- GuestLogix Inc. announces that the Company has commenced proceedings and obtained court protection under the Companies' Creditors Arrangement Act (the "CCAA") as the Company attempts to restructure and reorganize its assets, business and financial affairs. The operations of OpenJaw Technologies Limited are not subject to the CCAA proceedings.
After careful consideration of all other available alternatives, the Board of Directors of the Company determined that it was in the best interests of the Company and all of its stakeholders to file for an application for creditor protection under the CCAA. The Company has been otherwise unable to restructure its affairs in an adequate manner as a result of a combination of continuing negative operating results, the current state of the capital markets, and the inability of the Company to identify a suitable transaction from its previously announced strategic review process that would satisfy all of the Company's existing financial obligations, both secured and unsecured. Further, on February 8, 2016, the Company received a formal notice of default from its senior lender in respect of certain events of default under its senior credit facility and forbearance agreement.
Under the CCAA proceedings, it is expected that the Company's operations will continue uninterrupted in the ordinary course of business and that after the filing date, obligations to employees, key suppliers of goods and services and the Company's customers will continue to be met on an ongoing basis. The Company's management will remain responsible for the day-to-day operations of the Company.
To enable the Company and its operating subsidiaries to maintain normal business operations, the Initial Order is expected to provide a stay of certain creditor claims and the exercise of contractual rights arising out of the CCAA process and so provides the necessary protection to continue the Company's ongoing strategic review process under the oversight of the Board of Directors and with the advice of the Company's professional advisors. In this regard, the Company anticipates that it will make an application in the near future for a further court order to create a sale and investments solicitation process ("SISP") to be conducted in conjunction with the CCAA proceedings. The SISP is intended to generate interest in either the business or the assets of the Company or a recapitalization of the Company, with the goal of maximizing return in respect of the Company's assets and creating the foundation of a plan of compromise or arrangement for all stakeholders of the Company.
Subject to further court approval, it is anticipated that the Company will continue to retain Canaccord Genuity as sales agent, investment banker and financial advisor to the Company in connection with any proposed financing, recapitalization or sale transaction that may arise under the CCAA proceedings or any future SISP. A further court application related to approval of Canaccord Genuity's engagement is anticipated to proceed in the near future.
A Monitor of the Company for the CCAA proceedings is expected to be appointed later today. A copy of the CCAA Initial Order and other details will be made available on the Monitor's website.
Trading in the common shares of the Company on the Toronto Stock Exchange ("TSX") has been halted and it is anticipated that the trading thereof will continue to be halted until a review is undertaken by the TSX regarding the suitability of the Company for listing on the TSX.
Further news releases will be provided on an ongoing basis throughout the CCAA process as required by law or otherwise as may be determined necessary by the Company.