Lydian International Limited announced today that the Company and its direct and indirect wholly owned subsidiaries, Lydian Canada Ventures Corporation (“Lydian Canada”) and Lydian U.K. Corporation Limited (“Lydian UK”), were granted protection under the Companies’ Creditors Arrangement Act (the “CCAA”) pursuant to an order (the “Initial Order”) of the Ontario Superior Court of Justice (the “Court”). A stay was also granted in favour of Lydian Armenia CJSC, Lydian International Holdings Limited, Lydian Resources Armenia Limited, and Lydian U.S. Corporation.
The Court has granted CCAA protection for an initial 10 day period, which expires on January 2, 2020. While under CCAA protection, creditors and others are stayed from enforcing any rights against the Company, Lydian Canada, Lydian UK and a number of their direct subsidiaries including Lydian Armenia.
Since June 2018, illegal blockades have prevented access to the Company’s Amulsar Project in Armenia. Despite its many public statements that there is no legal basis on which to prevent the Company’s development of the Amulsar Project, the Government of Armenia has failed to remove the illegal blockades. As a result, the Company’s lenders were not prepared to further extend a previously announced forbearance agreement, which expired on December 20, 2019.
During the CCAA proceedings, it is expected that ordinary course obligations to employees and key suppliers of goods and services subsequent to the filing date will continue to be met. Management of the Company will remain responsible for the day-to-day operations under the general oversight of Alvarez & Marsal Canada Inc., who were appointed as the CCAA monitor (the “Monitor”) pursuant to the Initial Order.
While under CCAA protection, the Company intends to continue discussions with its lenders and others, including the Government of Armenia, to seek to maximize the outcome for all stakeholders including the hundreds of employees, contractors and suppliers affected by the ongoing illegal blockades. The Company also intends to pursue: (a) an end to the illegal actions which have resulted in Lydian Armenia’s inability to access the Amulsar Project; (b) the ability to pursue financing and/or sale options for the Amulsar Project; and (c) finalizing financing discussions with respect to potential foreign investment arbitration proceedings against the Government of Armenia.
Toronto Stock Exchange has suspended trading of the Company’s ordinary shares and is now reviewing the eligibility of the Company’s ordinary shares for listing on the TSX as a result of the Company being granted protection under the Companies’ Creditors Arrangement Act. The delisting hearing is expected to occur in early January 2020.