After more than 60 years in business, Penticton’s Structurlam has filed for bankruptcy with a $60 million US starting bid for its assets.
The mass timber manufacturer’s three facilities in Penticton and Okanagan Falls will remain open and operating as usual until the proceedings are complete.
“For all three it’s business as usual,” said Paul Sehn, media spokesperson for Structurlam. “Those will continue to operate until there is a formal new owner, and at that time it will be the prerogative of the new owner to decide what they want to do.”
Structurlam’s consolidated plant in Arkansas suspended its operations earlier this year, after the facility’s main contract with Walmart was cancelled. The loss of that contract led to the company filing for Chapter 11 bankruptcy in the U.S., and seeking to have that bankruptcy recognized in B.C.
Structurlam was formerly the provider for Walmart’s home office campus.
The company is one of the largest mass timber manufacturers in North America, and provided the prefabricated wood components used in the Brock Commons student residence at UBC, which at the time it was completed was the tallest mass timber building in the world.
Mercer International has placed a stalking horse bid on the company’s assets ahead of open bidding in May, which sets the base bid for Structurlam’s assets at $60 million USD.
“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 normalizing the plant operations going forward” said Matthew Karmel, CEO of Structurlam.
Bidding will open up in the middle of May, and the current timeline is expecting to have the most likely parties to take over Structurlam identified by early June.
While Structurlam will be going up for auction as a whole, it will remain an option that some of the facilities are bought out by different companies.
“It’s possible that one or multiple entities could come in with bids that are more attractive looking at just portions of the company,” said Sehn. “The ultimate decision will have to be endorsed by our board of directors.”
The employees at the Penticton and Okanagan Falls locations will continue to paid for their work through the bankruptcy proceedings.
Structurlam secured a $7.5 million debtor-in-possession facility from the Bank of Montreal to fund its operations throughout the court process.
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