A group including the general contractor for Ottawa’s Strandherd-Armstrong bridge was at risk for abandoning construction projects unless it filed for receivership, according to court documents.
A receivership notice naming ConCreate USL and other companies was filed March 16, citing $34.6 million owed to creditors. There is no word yet on how that will affect ongoing construction on the Ottawa bridge that was intended to link Barrhaven with Riverside South.
In a brief statement Tuesday, the city said a $23-million performance bond with ConCreate would assure construction would be completed. However, the statement did not say if the completion schedule would change.
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Documents posted on the website of receiver Grant Thornton show grave concerns from the Bank of Nova Scotia concerning the viability of the companies following a credit agreement in 2011.
ConCreate USL (GP) Inc., ConCreate USL LLP, Triwest Construction (GP) Inc., Triwest Construction Ltd. Partnership and Steel Design and Fabrications (SDF) Ltd. were collectively named in documents filed with the Ontario Superior Court of Justice.
ConCreate refers to TriWest Capital Partners as a “financial and operational partner” on its website.
“Triwest is one of Canada’s largest private equity firms and thus strengthens our access to financial and capital markets,” ConCreate stated.
Most of the court documents collectively referred to the listed companies in the receivership papers as “Triwest Construction.”
“Triwest Construction will be unable to make essential supplier and employee payments and … its business will rapidly deteriorate (including the abandonment of projects) unless the interim receiver is immediately appointed to stabilize the situation,” read an affidavit from Rick Sackfield, a senior manager with the bank.
“At present, due to its defaults, Triwest Construction has no ability to finance its ongoing costs and is insolvent.”
When contacted by OBJ, a representative answering ConCreate’s main line declined comment.
Triwest Construction entered into a credit agreement with Bank of Nova Scotia and the Bank of Montreal on Feb. 1, 2011. At that time, the documents say, BNS took security over assets owed by Triwest, including construction equipment.
Subsequently, the bank’s affidavit states, “cost estimates provided by Triwest Construction regarding the completion of several major projects were significantly understated, and project gross profit margins had been significantly overstated.”
According to the bank, Triwest took a write-down of $15.4 million and saw problems compounded when poor weather interfered with construction in 2011.
Triwest’s earnings before interest, taxes, depreciation and amortization fell from $19.9 million when the agreement was signed, to a loss of $8.5 million on Dec. 31, according to the affidavit.
The documents further allege breach of financial covenants on the part of Triwest.
The court has ordered “no proceeding or enforcement process” can proceed against the receiver or the companies until April 16.
The Ottawa bridge, estimated to be worth $45.2 million, is only 60 per cent complete. The city has already completed roadway construction intended to support the completed bridge.
“The intersections have been completed for the Earl Armstrong Road widening and Strandherd Drive extension to the extent that they can be until the bridge is opened to traffic,” wrote Coun. Steve Desroches in a blog post to constituents concerning the receivership.
In 2010, Concreate USL beat out four competitors to construct the bridge, with its bid coming in $1 million lower than the next-lowest bidder, R.W. Tomlinson.
The Bolton, Ont.-based company also built the Whistler Sliding Centre for the 2010 Vancouver Olympics.
The bridge, originally a piece of the city’s first light-rail transit plan, will span eight lanes across the Rideau River near south Barrhaven. The local BIA regards the bridge as key to developing the South Merivale Business Park, at Prince of Wales Drive.
