Fortress Global Enterprises Announces Unsuccessful Completion of Strategic Initiative
The Fortress Specialty Cellulose Mill is located in Thurso, Québec. The mill employs approximately 322 workers and has a planned annual production capacity of about 173,500 tonnes (ADMT) of specialty cellulose also known as dissolving pulp.
Dec. 10, 2019 (Press Release) - Fortress Global Enterprises Inc. (“Fortress” or the “Company”) (TSX:FGE) (OTCQX:FTPLF) announces that it has failed to receive any indications of interest pursuant to its previously announced strategic and financing initiative (the “Strategic Initiative”) by the required deadline under the financing agreement (the “Financing Agreement”) entered into among the Company's wholly owned subsidiaries, Fortress Specialty Cellulose Inc. and Fortress Bioenergy Ltd., and their secured lenders or their affiliates (together, the “Lenders”). Failure to meet a material deadline under the Strategic Initiative when required constitutes an event of default pursuant to the terms of the Financing Agreement.
The continued downward pressure on the market price for dissolving pulp as well as a variety of other factors and circumstances, have contributed to the Company's inability to generate positive free cash flow and maintain an adequate level of working capital. Since the launch of the Strategic Initiative in August 2019, the Company's Strategic Committee, with the assistance of its financial advisors, completed an extensive and international evaluation of various strategic and financing alternatives and engaged with numerous third parties and stakeholders. After allowing for the Strategic Initiative to be run thoroughly over several months, the process did not result in any acceptable third-party bids.
The Company has not received any notice of default from the Lenders nor have the Lenders taken any action or made any demand pursuant to the terms of the Financing Agreement. The Company continues to engage in active discussions with the Lenders in order to secure the long-term financial viability of the Company's business and develop a negotiated restructuring plan, however no assurance can be provided that any resolution will be reached or that the Lenders will not take enforcement measures under the Financing Agreement.
There is also no assurance that the Company or the Lenders will not commence any form of creditor protection or insolvency proceeding imminently or in the near future.
Fortress operates its dissolving pulp business at the FSC Mill located in Thurso, Québec, which also operates in the renewable energy generation sector through its cogeneration facility. Fortress operates its bioproducts business through Fortress Advanced Bioproducts Inc., which has laboratory and pilot plant facilities in Vancouver, British Columbia. To learn more, visit: www.fortressge.com.
SOURCE: Fortress Global Enterprises Inc.