sexta-feira, 26 de junho de 2015

MbAC in legal hot water

TORONTO (miningweekly.com) – Brazil-focused project developer MBAC Fertilizer on Monday reported that subsidiary Itafós Mineracão was facing two lawsuits that could derail progress made with the company’s strategic review process. The TSX-listed company said that it was defending itself against claims laid by the Brazilian Labour Public Ministry and the Arraias City Hall against certain of the company’s assets in the country. MBAC was challenging certain rulings rendered thus far and said that protocols for the rehiring of employees would be followed once the strategic review process was complete. The company and its lenders were currently evaluating proposals and defining next steps after it placed its flagship Itafós Arraias operation on care and maintenance earlier this year and offered employees severance packages. The chosen proposal was expected to address MBAC's liquidity shortcomings and the lawsuits, and result in operations at its Itafós Arraias project restarting. MBAC was undertaking a strategic process in collaboration with its senior lenders. Options under consideration included securing a strategic partner, the sale of the company or its assets as well as other potential value-maximising transactions. The first lawsuit related to a combination of a class action and individual claims from former employees for severance payments stemming from the company's cost-cutting restructuring initiative. The total value claimed amounted to about $13.1-million, which included the original outstanding severance amount of about $1.6-million and damages of about $11.5-million. MBAC said that it had already settled 120 individual claims heard to date using a working capital facility of $400 000 obtained from one of its senior lenders for this purpose. Once all individual claims had been settled, MBAC expected to be able to significantly reduce the total amount of penalties and damages that were being claimed. A labour judge of the State of Tocantins had placed certain of the company's fixed and non-fixed assets valued at $2.7-million in escrow to cover payments related to the claims and had ruled that the assets be sold in an auction at the end of the month. These assets, however, were pledged to Itafós' lenders as part of the security package under the company's project loan financing. As a result, the lenders were working to stop the auction, MBAC said. The second lawsuit related to a notification received on June 10 of a tax claim from the Arraias City Hall relating to municipal services taxes (ISS). The claim stated that the ISS associated with all services rendered to Itafós should be remitted to the City of Arraias regardless of whether the services were rendered locally or remotely. The total ISS amount being claimed was about $1.9-million, as well as penalties and interest of $1.6-million for a total of $3.5-million. The company believed that it had remitted ISS correctly in

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