Baffinland seeks court approval for sale of assets

Baffinland Iron Mines Corp. is seeking court approval to solicit bids on its shares and assets, which may include its Mary River Mine.

The company operates the mine on north Baffin Island and touts its ore as some of the highest-grade in the world. It began operations in 2014.

Baffinland sought creditor protection in May and a judge approved a $660-million loan from Export Development Canada in June so the mine could remain operational through this year’s shipping season.

The company owes more than $1.2 billion it says it cannot repay to lenders that include private equity firms, the federal and Nunavut governments, and Inuit organizations and businesses.

The $660-million “debtor-in-possession” loan, said Export Development Canada lawyers Oct. 2 in a court filing, was “expressly tied” to Baffinland pursuing a sale of its assets.

The company’s debtors, lawyers and executives are hammering out details for what this proposed sale and investment solicitation process would look like.

At question is who has final say over a potential deal to sell the company or its assets. Export Development Canada and the company’s lenders want a neutral, court-appointed officer and court monitor to have final say, while Baffinland is pushing for a committee of shareholder representatives.

Meanwhile, Baffinland continues to operate while working through the creditor protection process, said company spokesperson Peter Akman Tuesday in an emailed statement.

“The court has not approved a sale of Mary River mine,” he said, adding a sale and investment solicitation process will explore “several” options, including refinancing.

A judge is scheduled to hear the proposed sale process on Oct. 9.