Bionx Canada Ltd. Receivership Update #1 - Sales Process Begins

On March 21st, we posted about the Bionx Canada receivership, a sad but intriguing story of a Canadian electric bike propulsion manufacturer going into receivership while tangled up in a dispute with General Motors. The full article is here.

As we outlined in the article, the Receiver, Grant Thorton, proposed a 90 day process to complete the sale of Bionx, or "to market the Company’s right, title and interest in the Property (the “Sale Process”), including the Company’s inventory, manufacturing equipment, warehouse equipment, customer lists, and intellectual property/patents among other things."

The Solicitation of Interest has been completed by Grant Thorton and they are now actively seeking interested parties - The Solicitation of Interest can be found here.  As the data room is behind an Non-Disclosure Agreement, our hands are bit tied on providing detail on how the sale is being positioned.

Interestingly, the Company's website continues to be a bit silent about the whole process (the Receiver is handling the required notices) indicating that the plan or hope at least is to continue Bionx as a brand rather than a be treated as a sale of the intellectual property.

The Deadline for offers is May 15, 2018. Stay tuned.

Toys R Us Canada CCAA

Toys R Us – A Series Of Imprudent Events, and the Promising Story Of Its Canadian Subsidiary

#SaveGeoffreytheGiraffe

NOTE: This CCAA restructuring is ongoing. This article is current as of March 30, 2018.

 “Innovate or die” might explain some retail bankruptcies, but Toys R Us is a more nuanced story of “Keep servicing US$5.3bn of debt which by the way severely impacts your ability to innovate, Maintain supplier terms during the holiday inventory buildup, Don’t have all your debt maturing in a 4-year period, and Make sure nothing bad happens to your profitable Canadian subsidiary (or die).”

The last point is least covered, and today we will be focusing on Toys "R" Us (Canada) Ltd. Toys "R" Us (Canada) Ltee (“Toys Canada” or the “Company”), the profitable Canadian subsidiary of the broader Toys R Us company.

As quick background, on September 18, 2018, Toys R US-Delaware (“Toys Delaware”, or the “Parent” company of Toys Canada) filed for debtor relief under Chapter 11 in the US. The following day on September 19, Toys Canada filed for and was granted a stay of proceedings under the Companies’ Creditors Arrangement Act (“CCAA”), with Grant Thornton acting as CCAA Monitor (“Grant Thornton” or the “Monitor”).

However, Geoffrey The Giraffe – the iconic Toys R Us mascot, for those who never had the joy of walking into a store – still has some fight left in him, as Toys Canada is seeking buyers that might keep this profitable gem running.

BionX Canada - An Electric Bike Receivership

NOTE: This receivership is in progress. We will be updating this article as it progresses. You can also subscribe to our newsletter for updates here!

April 29th Update - Sale Process Begins - See the article here.

History and Overview

On February 27, 2018, Grant Thornton (the “Receiver”) was appointed as receiver over BionX Canada Inc. and its subsidiaries (“BionX” or “the Company”), an Aurora, Ontario-based electric bicycle propulsion system company which had two primary products:

• BionX System: Lithium-ion powered electric motor attaching to a bicycle’s back wheel hub, sold under the BionX brand
• General Motors (“GM”) System: Custom-built electric propulsion systems, which were to be designed, developed and manufactured by BionX, and fitted on GM-supplier bicycles

BionX’s main operations were in Aurora, where the bike propulsion systems were manufactured. The Company also had international sales operations, and a research and development arm in Sherbrooke, Quebec.

BionX was founded by Manfred Gingl, a former Magna International (auto part manufacturer) executive. BionX was funded largely by (i) secured loans from Frank Stronach, the founder of Magna, through his Stronach Consulting Corp (“SCC”) entity, and (ii) unsecured intercompany loans from its parent BionX International Corporation.

 

Receiver Certificate Financing

SCC is providing a Receiver Certificate for up to $1.25MM...