Xebec Seeks Creditor Protection Under the Companies’ Creditors Arrangement Act

Rhea-AI Summary

Xebec Adsorption Inc. has announced an application for an initial order under the Companies’ Creditors Arrangement Act (CCAA) to facilitate a restructuring process. The court order aims to stay creditor claims and enable a sale or investment solicitation for its assets. Trading of Xebec's common shares on the Toronto Stock Exchange (TSX) is expected to be halted pending a review of its listing suitability. The board believes creditor protection is in the best interest of stakeholders. Legal and financial advisors have been appointed for these proceedings.

Positive

• None.

Negative

• Application for CCAA protection may indicate serious financial distress.
• Trading on the TSX is expected to be halted, suggesting potential liquidity issues.
• No assurance of residual value for shareholders during the CCAA process.

MONTRÉAL--(BUSINESS WIRE)-- Xebec Adsorption Inc. (TSX: XBC) (“Xebec” or the “Corporation”), a global provider of sustainable gas solutions, announces that it will file today an application with the Superior Court of Québec (the “Court”) for an initial order (the “Initial Order”) under the Companies’ Creditors Arrangement Act (the “CCAA”) and seek recognition of the Initial Order in the United States under Chapter 15 of the Bankruptcy Code.

The Initial Order is expected to provide a stay of proceedings and creditor claims in favour of Xebec and its Canadian and U.S. wholly owned subsidiaries in order to allow the Xebec group to implement further restructuring initiatives and initiate a Court-approved sale and investment solicitation process to solicit interest in a sale of, or investment in, all or part of the assets and business segments of the Corporation and its subsidiaries, with the goal of maximizing value for the Corporation and its stakeholders.

Decision Process

After careful consideration of all available alternatives, the boards of directors of each filing entity of the Xebec group determined that it was in the best interests of each filing entity, and of their respective stakeholders generally, to seek creditor protection under the CCAA.

Trading in the Common Shares of the Corporation

As a result of the CCAA filing, trading in the common shares of the Corporation on the Toronto Stock Exchange (“TSX”) is expected to be 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 Corporation to remain listed on the TSX.

The Corporation will provide a further update on these matters once more information is available.

Advisors

Xebec’s legal advisors in connection with the CCAA and Chapter 15 proceedings are Osler, Hoskin & Harcourt LLP and McDonald Hopkins LLC. The Corporation’s financial advisor is National Bank Financial Inc.

Related link:

https://www.xebecinc.com

About Xebec Adsorption Inc.

Xebec is a global provider of clean energy solutions for renewable and low carbon gases used in energy, mobility and industrial applications. The company specializes in deploying a portfolio of proprietary technologies for the distributed production of hydrogen, renewable natural gas, oxygen and nitrogen. By focusing on environmentally responsible gas generation, Xebec has helped thousands of customers around the world reduce their carbon footprints and operating costs. Headquartered in Québec, Canada, Xebec has a worldwide presence with nine manufacturing facilities, seventeen Cleantech Service Centers and four sales offices spanning over four continents. For more information, see www.xebecinc.com.

Cautionary Statement

All statements, other than statements of historical fact, contained in this press release constitute “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of applicable securities laws and are based on expectations and projections as of the date of this press release. Forward-looking statements typically contain words such as “believes”, “expects”, “anticipates”, “continues”, “could”, “indicates”, “plans”, “will”, “intends”, “may”, “projects”, “schedules”, “would” or similar expressions suggesting future outcomes or events, although not all forward-looking statements contain these identifying words.

Forward-looking statements contained in this press release include, without limitation, those related to (i) the CCAA application and proceedings, including the outcome of the application for an Initial Order, (ii) the obtaining of the approval of the Court to initiate a formal sale and investment solicitation process and (iii) halt of trading on the TSX and any review by the TSX regarding the suitability of the Corporation for listing on the TSX.

These statements are neither promises nor guarantees but involve known and unknown risks and uncertainties that may cause Xebec’s actual results, level of activity or performance to be materially different from any future results, levels of activity or performance expressed in or implied by these forward-looking statements, including the ability for the Corporation to obtain financing during and following the CCAA process, general economic conditions and other risks other factors which are discussed in greater details in the Corporation’s Management’s Discussion and Analysis for the period ended June 30, 2022, the Corporation’s Annual Information Form as well as other filings made by the Corporation which are available under the Corporation’s profile on SEDAR at www.sedar.com. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Corporation as of the time of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. These estimates and assumptions may prove to be incorrect. In addition, there is no assurance that there will be any residual value for shareholders under the CCAA process.

If these assumptions prove to be inaccurate, Xebec’s actual results may differ materially from those expressed or implied in the forward-looking statements. In addition, there can be no assurance that the CCAA proceedings will result in the maximization of the return in respect of the Corporation’s assets and those of its subsidiaries.

The forward-looking statements contained herein are made as of the date of this press release and are expressly qualified in their entirety by this cautionary statement. Except to the extent required by law, Xebec undertakes no obligation to publicly update or revise any forward-looking statements contained herein. Readers should not place undue reliance on forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220929005305/en/

Investor Relations:

Xebec Adsorption Inc.

investors@xebecinc.com

+1 450-979-8700

Source: Xebec Adsorption Inc.

FAQ

What is Xebec's recent bankruptcy filing about?

Xebec has filed for an initial order under the CCAA to restructure and stay creditor claims.

How will Xebec's stock be affected by the CCAA filing?

Trading of Xebec's common shares on the TSX is expected to be halted pending a review.

What does the CCAA filing mean for Xebec's shareholders?

There is no assurance of any residual value for shareholders under the CCAA proceedings.

Who are Xebec's advisors during the restructuring process?

Xebec's legal advisors are Osler, Hoskin & Harcourt LLP and McDonald Hopkins LLC, with National Bank Financial Inc. as the financial advisor.