Gemini Corporation has come under a receivership order.
The announcement was made April 19 that Gemini (GKX-TSXV) was made the subject of the receivership order by the Court of Queens Bench by an application from ATB Financial, the company’s secure creditor.
To assist with the process, FTI Consulting Canada Inc. was appointed the receiver and manager of all of Gemini’s current and future assets states the press release. The company’s shares continue to be cease traded.
“All of the company’s board of directors and officers have resigned concurrently with the appointment of the receiver,” states the release.
The company’s plant in Ponoka continues to operate while the order takes place.
Gemini, which has been operating for more than three decades, has gone through some major restructuring recently.
The company’s 2017 third quarter results showed a need for restructuring. In a Nov. 28, 2017 release, the company CFO, Chris Podolsky, pointed out some changes to the executive leadership team.
“This restructuring will include changes to the executive leadership team and significant reductions in personnel resulting in a $6 million annual reduction in overhead costs,” states the release.
“On Nov. 28, 2017, our lender amended the financial covenants until March 31, 2018 to reflect the new plan put forth by Gemini, and has committed to working with management to implement a new covenant package after that date that will reflect the new state of the company.”
At that time the company saw a higher net loss for the 2017 third quarter ($3.2 million) compared to 2016 for the same period ($1.2 million).
That same day the company issued a release related to restructuring.
“Significant personnel reductions will occur primarily in Calgary with the elimination of 22 staff and 15 contractor positions. This will result in cost reductions of approximately $6 million in annual general and administrative expenses and indirect project costs when combined with other initiatives,” states the release, which added that severance would cost around $2 to $2.5 million.
The business market is quite competitive, along with a slower than expected economic recovery, appear to be two factors that lead to the change.
“Given the continued pressure on gross profit margins due to the current economic environment, we believe reducing overheads and refocusing our resources on our core field operations is an effective way to return us to profitability in 2018.”
There were some executive departures as well. Peter Sametz, president and CEO, and Roger Harripersad, vice president of human resources resigned from Gemini.
About one month later, board director Susannah Pierce announced her resignation from the board.
Gemini is known for fabricating large units that are then transported to Fort McMurray and other areas of the province. The company recently worked with Ponoka County to create a high load corridor for Highway 21.
FTI Consulting declined to a request for comment.