Mass timber manufacturer Structurlam Mass Timber Corporation has announced that it has entered into a stalking horse asset purchase agreement (APA) with Mercer International to sell substantially all the company’s assets in British Columbia, Canada and Arkansas for US$60m.
The APA or stalking horse offer is a bid for the bankrupt firm or its assets. In this case, Structurlam has filed for bankruptcy, and Mercer International will be buying over all of the company’s assets.
In conjunction with the APA, Structurlam Mass Timber has voluntarily filed petition for relief under Chapter 11 of the US code. Recognition of the Chapter 11 proceedings will be sought in the Supreme Court of British Columbia shortly thereafter.
The APA is subject to higher and better offers as part of a court monitored auction process. In addition, Structurlam secured a C$7.5 million debtor-in-possession facility from the Bank of Montreal to fund its operations throughout the court process.
“I am delighted and grateful for Mercer’s vote of confidence in Structurlam and in its leadership in the mass timber industry. It is especially rewarding given the difficult period the company has had since suspending its operations in Arkansas mid-January, and it will help in normalising the plant operations going forward,” said Matthew Karmel, CEO of Structurlam Mass Timber Corporation.