Ontario’s Superior Court of Justice has appointed receivers for Canadian drinks group Flow Beverage.
Richter has been named the receiver of the business set to be taken over by lenders.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
In a statement, the publicly listed Flow Beverage said Patrick Bousquet-Chavanne, Stephen Smith, Michael Lines and Nicholas Reichenbach had resigned from the company’s board of directors.
Reichenbach stepped down as executive chairman and CEO of Flow Beverage last month amid repayment demands from lenders NFS Leasing Canada and RI Flow.
At the time, the company said its board of directors was to “remain in place and is committed to steering the company through these challenges”, with a committee of independent directors mulling “various alternatives to address the situation and pursue strategic alternatives in the best of interest of the company and its stakeholders”.
A week later, it emerged Flow Beverage had struck a deal with NFS Leasing Canada and RI Flow centred on a structured foreclosure, whereby the ownership of its business would shift to the lenders or their designated representative.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe decision came after what Flow Beverage described as an “exhaustive strategic review” that “considered all alternatives in the circumstances” to address its “liquidity challenges”.
As part of the restructuring transaction, the lenders, or their assignee, will acquire “substantially all” the company’s assets in exchange for extinguishing its debt.
Some of the debt will remain with Flow Beverage but the statement said the company will have “an improved and deleveraged balance sheet”.
After the completion of the deal, the company’s remaining assets and liabilities will be wound down under court supervision.
According to documents issued online by Richter, Flow Beverage had marketed itself three times in the past three years without securing “a binding purchase or investment offer”.
NFS Leasing Canada and RI Flow had provided loans of C$57.6m ($41.68m) and $9.9m, the documents say. However, Flow Beverage’s financial condition had “deteriorated” since the loans were made.
“The debtors [Flow Beverage] are hopelessly insolvent, with asset values far below the outstanding debt, leaving the applicants [the lenders] as the only stakeholders with an economic interest in the business,” the document read.
“The applicants have also consulted other secured creditors and suppliers, which are not expected to oppose the transaction. Given the failed sale processes, escalating operational crises and the need for a structured transaction, the applicants believe the appointment of a receiver on the terms of the proposed appointment order is in the best interests of all stakeholders.”
