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Roadbuilding
July 28, 2008
Quarry developer Birch Mountain Resources puts itself up for sale
CALGARY
Birch Mountain Resources Ltd., a Calgary-based quarry developer and limestone and sand and gravel producer, says it is seeking an immediate sale of the company, which has defaulted on its loan agreement with its main banker.
Birch Mountain said that a special committee of independent directors and the board “have determined that it is imperative to pursue an immediate sale of the company to unlock maximum value for its shareholders.
“The company believes that the current lack of liquidity has compressed Birch Mountain’s share price to below its underlying value.”
The company said it has defaulted on the financial covenants in the loan agreement with its senior secured lender and is in talks with the banker and its financial adviser, RBC Capital Markets.
“It is the company’s belief that an immediate and focused sale process will maximize value,” Birch Mountain said.
“In the event this immediate sales process does not achieve an acceptable price, the company intends to work with its stakeholders to recapitalize the balance sheet.”
In another development, Birch Mountain said it has signed an agreement with the East Athabasca Highway Proponents led by major oilsands operator Suncor Energy Ltd. for the acquisition, construction and operation of the South Haul Road in northern Alberta.
The sale price is $4.8 million and Birch Mountain will also sell sand and gravel to build the road, which is part of an expanded transportation network to the northern Alberta oilsands.
“The South Haul Road is an integral link to the proposed East Athabasca Highway and will facilitate building this new highway that will extend east to several oilsands projects,” said Joel Jarding, president of Birch Mountain.
DCN News Services
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