Skeena Sawmills and its associated operations might be in a significantly worse financial situation than initially anticipated.
A petition has been filed in the BC Supreme Court by the companies’ primary lender, alleging $143 million in debt accrued from loans.
It comes following a year of stagnant revenues prompted by high operating costs, a weak lumber market, and a dwindling supply of economic fibre.
In the past, the lender, numbered company 1392752 BC Limited, had funded the operation’s losses, but have now lost confidence.
As a result, their petition, filed last week, calls for a receiver and manager to be appointed to take control of and sell off the companies’ assets.
It would cover all assets held by Sawmills, the Skeena Bioenergy pellet plant, and owner ROC Holdings.
But, in another twist, the lender is also controlled by the same parties who control the three operations, Xiao Peng Cui and Shenwei Wu.
According to the filing, the companies are also indebted to various other groups for over $22 million, and owe $1.1 million in stumpage fees.
If that wasn’t enough, they have also been unable to pay their gas bill, or over $1.8 million in property taxes owed since 2021.
In the petition, the lender calls for Alvarez and Marsal Canada Inc to be appointed as debt receiver.
A hearing will be held on September 20th to determine whether or not the petition will stand.
