Xplore, Canada's largest rural internet provider, files for CCAA creditor protection

The Ontario Superior Court of Justice granted Xplore an initial order under the Companies' Creditors Arrangement Act, the company announced on 10 November, and named FTI Consulting Canada Inc. as monitor. CCAA protection is a court-supervised restructuring. The company keeps trading while it negotiates with creditors, and it has not been declared bankrupt. Xplore said it had arranged debtor-in-possession (DIP) financing, new money to keep the business running during the case.

Xplore said its rural fibre projects rely on government subsidies that are mostly paid out near the end of construction, so it must spend hundreds of millions of Canadian dollars before the money arrives. Slow permits, other outside problems and the late timing of those payments made it harder to raise capital for the builds, the company said. It plans to rework parts of the business, the fibre projects among them, along with its capital structure, and said recent trading results were not the reason for the filing.

Customers keep their existing contracts, prices and support, and do not need to do anything, according to the announcement. Suppliers get paid for goods and services delivered from the filing date onward. Money owed for anything supplied earlier will be dealt with in the court process. Xplore gave no figure for its debts and did not say how many people it employs or whether any jobs are affected.

Canada's Office of the Superintendent of Bankruptcy says an initial order usually protects a company from its creditors for 30 days, and that a comeback hearing, where creditors can challenge the order, must take place within 30 days of it. Xplore did not give a date for that hearing. It said FTI's website will carry the court documents and the monitor's reports.