Unsecured creditors get nothing from Poseidon sale
Texas buyer’s bid was $47M; lending syndicate owed $79.2M
CALGARY — The sale of most of the assets of insolvent Poseidon Concepts Corp. has been concluded, the company reported Tuesday, but will leave secured and unsecured creditors owed millions.
An online report by court- appointed monitor PricewaterhouseCoopers Inc. last week notes Rockwater Energy Solutions, a Houston-based oi-and-gas services company with operations across the United States and Western Canada, bid $53.2 million in early June.
The bid for assets including the Calgary company’s storage tanks that resemble aboveground swimming pools, water heaters and other gear, was revised to $47 million after being adjusted for working capital, excluded assets and Edson real estate the buyer decided not to acquire.
The final amount is subject to further adjustments over the next month, but falls well short of the $79.2 million owed members of Poseidon’s lending syndicate and leaves no funds to pay unsecured creditors.
Layfield Geosynthetics and Industrial Fabrics Ltd., the company that made the liners that fit inside Poseidon’s tanks, filed a claim for $522,000 with PwC.
Brian Fraser, vice-president of sales in Edmonton, said Tuesday that news that it’s unlikely to recover any of that money is “not totally unexpected” and the Vancouverbased company will be able to absorb the loss.
“Obviously, we’re not happy,” he said. “You wish you were better protected (by regulators), in terms of auditors, etc., but it is business, isn’t it?
“We did business with Poseidon from Day 1 so we certainly had some good earning years but, that being said, we were certainly upset with the business practices and hope corrective actions in the future can be brought to market.”
In April, a small trucking firm in Taber owed $270,000 by Poseidon reported it would have to shut down.
Poseidon has been under creditor protection in Canada and the U.S. since early April.
More than 100 creditors claimed a total of $94.4 million owed by the company, which once had a market value of $1.3 billion and was the biggest producer of oilfield water storage and containment systems in North America.
It was delisted from the Toronto Stock Exchange as of May 19 after being suspended in early February when it revealed it would have to restate financial reports for the first nine months of 2012.
The company said at the time two-thirds of its $148 million in revenue for the nine months ended Sept. 30 and about $100 million of its $126 million accounts receivable were improperly recorded.
In its report to the courts last week, PwC said between May 22 and June 20 the company set up 23 of its tanks for customers in the United States and removed 10; in Canada, it set up no tanks and recovered 10.
It said it rented 11 tanks to Rockwater under sales agreement terms.
Poseidon employed 13 staff in the United States and seven in Canada as of last week, PwC reported.
The monitor has applied for court approval to distribute $27 million to the lending syndicate as an interim distribution, holding back about $9.8 million to cover potential liabilities including employee wages. A further $4 million was to be handed over to lenders from Poseidon itself.