CLI Clearford Water Systems Inc

OTTAWA, ON, May 13, 2022 /CNW/ - Clearford Water Systems Inc. (TSXV: CLI) ("Clearford" or the "Company") announces that on May 12, 2022 (the "Filing Date") it filed a Proposal ("Proposal") pursuant to the provisions of Part III of the Bankruptcy and Insolvency Act (Canada) (the "BIA").

As announced on April 29, 2022, the Company filed a Notice of Intention to Make a Proposal (the "NOI") pursuant to Section 50.4 of the BIA and KSV Restructuring Inc. was appointed as the proposal trustee (the "Proposal Trustee") in the Company's Proposal proceedings and is assisting the Company in its restructuring efforts. The Proposal Trustee has the authority to, among other things, report to the Company's creditors on the Proposal, assist with the proof of claims process, chair the meeting of the creditors (the "Meeting") (subject to the approval of the Official Receiver) and generally assist with Clearford's restructuring.

The Proposal was developed with the support of certain senior secured creditors (the "Sponsors"). On May 12, 2022, the Company and the Sponsors executed a Restructuring and Support Agreement in which the Sponsors outline the terms of their support for the compromises, arrangements and transactions contemplated by the Proposal and agree to continue to fund the Company through to the conclusion of the restructuring process. The Company, therefore, is expected to meet all of its obligations incurred after the Filing Date.

The Proposal is intended to fully satisfy the Company's obligations to both its unsecured creditors and the Sponsors, as well as to continue its business as a going concern. As announced on April 29, 2022, only Clearford Water Systems Inc. has filed the Proposal, and its subsidiaries, including Clearford Waterworks Inc. are not subject to these proceedings. All of Clearford's subsidiaries continue to operate in the ordinary course.

If the Proposal is approved, it is anticipated that the Company's issued and outstanding common shares will be exchanged for redeemable shares. The redeemable shares are expected to be redeemed for nominal consideration in the aggregate and, pending Court approval of the Proposal, delisted. Trading in the Company's common shares on the TSX Venture Exchange ("TSX-V") remains halted. There is no certainty as to timing or likelihood that the common shares will recommence trading on the TSX-V.

The commencement of the NOI proceedings has the effect of imposing a statutory stay of proceedings that protects the Company and its assets from enforcement action while the Proposal Trustee takes the steps necessary to advance the restructuring process and to conduct the Meeting to vote on the Proposal and, if approved by the creditors, to schedule the hearing for Court approval of the Proposal.

It is expected that the meeting of the Company's creditors will be held June 2, 2022.  Further details regarding the date and time of the meeting of creditors will be available on the Proposal Trustee's website by May 13, 2022. Creditors will also receive notification from the Proposal Trustee of the date and time of the creditors' meeting.

Clearford believes that the Proposal provides the best possible outcome for its stakeholders in the circumstances, and also allows for the continuity of the business.

Within ten days of the creditors' meeting the Proposal Trustee will be sending a report concerning the Proposal to all of the Company's known creditors. The Proposal Trustee will also be sending all known creditors a proof of claim form.  Information regarding these proceedings is available on the Proposal Trustee's website (https://www.ksvadvisory.com/experience/case/cwsi).

Clearford also announces today the departure of its CFO, Mark McGuire. Mr. McGuire's tenure as the Company's CFO will end effective June 23, 2022. The Company thanks Mr. McGuire for his service.

Clearford Water Systems is a provider of unified water management solutions for the design, deployment, finance and operation of water infrastructure systems. Clearford is one of the largest operators of private water and wastewater systems in Ontario with over 260 sites across the province. Our diverse team of licensed engineers, certified operators and technical staff provide total solutions that meet the water management needs of owners, property managers, and communities. In-house personnel include designers and technical specialists in, water and wastewater, engineering, compliance & regulations, construction services, and health & safety.

The Company's technology-based water solutions include Clearford One® wastewater infrastructure systems, and a full range of UV Pure® water disinfection products. Clearford is the winner of the Frost & Sullivan 2017 Enabling Technology Leadership Award for Global Decentralized Water & Wastewater Treatment. For more information, visit www.clearford.com.

This news release includes certain "forward-looking statements" under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements can be identified by words such as: "anticipate," "expect," "likely," "plan," "will" and similar references to future periods. Forward-looking statements in this news release include, but are not limited to, statements regarding the Company's ability to complete a creditor proposal, bankruptcy, or complete a restructuring, its ability to continue as a going concern, its ability to meet all of its obligations incurred from the Filing Date, the trading status of the common shares of the Company, or the exchange of common shares for redeemable shares. The statements are dependent on a number of assumptions and risk factors. Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected effects on the Company. These forward-looking statements are made as of the date of this press release. Except as required by applicable securities legislation, the Company assumes no obligation to update publicly or revise any forward-looking statements to reflect subsequent information, events, or circumstances.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in ‎the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of ‎this release.‎

SOURCE Clearford Water Systems Inc.