Bridging sale scrapped; more than $1B in losses expected

PricewaterhouseCoopers, which has been managing the affairs of troubled Bay Street lender Bridging Finance for almost a year, has scrapped the sale process and said it will instead opt for an orderly wind down.

PricewaterhouseCoopers (PwC), which has been managing the affairs of troubled Bay Street lender Bridging Finance for almost a year, has scrapped the sale process and said it will instead opt for an orderly wind down, which it warned could result in more than $1 billion in losses for investors.

In an update filed Friday, PwC said it determined that a liquidation of Bridging’s assets is the best course of action, particularly after identifying “significant issues” with many of the firm’s loans.

It estimated that it will be able to recover between $701 million and $880 million on behalf of the lender’s investors. That would represent a recovery of just 34 to 42 per cent of Bridging’s net asset value (NAV) of $2.09 billion that was reported as of March 31, 2021.

It’s an anti-climactic culmination of a sale and investment solicitation process that PwC said at one point saw more than 200 parties involved. That pool of potential bidders was eventually narrowed down to just for bids for all of Bridging’s assets. In its report, PwC said those bids were at a “significant discount” to NAV.

PwC said it hopes to make an initial distribution of wind-down proceeds by June 30.

Bridging Finance was put into receivership by the Ontario Superior Court of Justice on April 30, 2021, at the behest of Ontario Securities Commission (OSC) staff as it investigated alleged violations of securities laws at the lender. OSC staff have alleged tens of millions of dollars were misappropriated from its investment funds, and also claimed improper dealings occurred with two key clients, Sean McCoshen and Gary Ng.