BioAmber files for stay of proceedings on creditors in restructuring effort
US-headed bio-based chemical producer BioAmber Inc., has announced that it has filed a voluntary petition for relief under chapter 11 of the United States Bankruptcy Code and that its two Canadian subsidiaries, BioAmber Sarnia Inc. and BioAmber Canada Inc., filed a Notice of Intention (NOI) to make a proposal under the Bankruptcy and Insolvency Act (Canada), with a view to strengthening the company's financial health and solidifying its long-term business prospects.
According to a statement May 4, BioAmber believes that filing these procedures is the “best way to protect all stakeholders” and will best facilitate its efforts to renegotiate its debt and raise the funds needed to continue its operations.
The filing of these procedures has the effect of imposing an automatic stay of proceedings that will protect the company, its Canadian subsidiaries, and their assets from the claims of creditors while the company pursues its restructuring efforts.
This process will provide BioAmber with the time and stability to restructure its finances. This restructuring, combined with the significantly improved cost structure we anticipate, will position BioAmber to emerge as a much stronger company which will be better positioned to meet the growing global demand we see for our product, said Richard Eno, Chief Executive Officer of BioAmber.
There can be no guarantee that the company will be successful in securing further financing or achieving its restructuring objectives. Failure by the company to achieve its financing and restructuring goals will likely result in the company and/or its subsidiaries being forced to cease operations and liquidate its assets.
Pursuant to the NOI filing, PricewaterhouseCoopers Inc. has been appointed as the trustee in the proposal proceedings of BioAmber Sarnia Inc. and BioAmber Canada Inc., and in that capacity will monitor and assist the company in its restructuring effort.