The Securities Commission has granted a partial revocation of a cease trade order (CTO) against an issuer, which was initially imposed due to the issuer’s failure to file required financial documents. The issuer sought the revocation to facilitate a reorganization plan under the Companies’ Creditors Arrangement Act (CCAA) and to complete a transaction where all its shares would be acquired by another reporting issuer.
The issuer had been under CCAA protection, and various court orders were issued to support its restructuring, including the approval of a sales process and interim financing. The issuer’s shares were delisted from the TSX Venture Exchange and the London Stock Exchange, and trading was suspended on the NEX due to non-compliance with listing requirements.
A share purchase agreement was made for the acquisition of the issuer’s shares by West Red Lake Gold Mines Ltd. (WRLG), which required the issuer to cease being a reporting issuer before the acquisition’s effective date. The issuer also underwent a reverse vesting transaction, becoming a wholly-owned subsidiary of a newly incorporated entity (NewCo).
The issuer did not meet its filing obligations under National Instrument 51-102 and National Instrument 52-109, resulting in the CTO. However, it was not in default of other securities legislation. The issuer had a limited number of security holders and did not intend to seek public financing.
Given these circumstances, the Securities Commission determined that the partial revocation of the CTO was warranted, allowing the issuer to cease being a reporting issuer and facilitating the completion of the acquisition by WRLG. The decision was made under the applicable securities legislation, including sections 127 and 144 of the Securities Act (Ontario), and was in line with National Policy 11-207 regarding Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions.