Sale process for Stephenville airport gets green light as judge grants receivership order

The beleaguered Stephenville airport is now on the block, after a Newfoundland and Labrador Supreme Court judge approved a plan to seek buyers for the insolvent facility.

A major creditor, BTG Capital, pushed the numbered company that owns the airport into interim receivership in late January.

Justice Alexander MacDonald granted a full receivership order on Monday afternoon, and green lit the court-supervised sales process going forward.

There is at least one interested party — an entity linked to BTG Capital itself.

The Calgary-based private equity firm has committed to a so-called “stalking horse” bid, which effectively sets a floor price for any other potential offers.

According to court filings, that minimum bid will approach $6 million.

That includes an estimated $1.7 million to satisfy priority claims on the airport.

Those priority claims consist of more than $765,000 in municipal taxes owed to the Town of Stephenville, $433,000 for the Canada Revenue Agency, and hundreds of thousands in receiver’s fees and wind-down costs.

Another $800,000 will go towards interim financing to fund security, insurance, payroll and other expenses during the receivership process.

And then there is $3.4 million that will be owed to BTG by the expected closing date in early June — an amount that includes $900,000 in interest at a rate of 49.667 per cent tacked on beginning Jan. 12.

Phase one of the process will last just under a month. It will seek non-binding expressions of interest in the airport from other potential purchasers.

Phase two will only be triggered if there is more than one letter of intent received by the early April deadline.

It will also last a month, giving bidders a chance to finish due diligence and prepare a binding offer.

If BTG’s stalking horse bid is the only one on the table at the end of phase one, it will proceed through a court-supervised approval process.