Norterra Inc. files bankruptcy, owing $81M to Inuvialuit Development Corp.
Officials say the loans written off years ago, kept NTCL afloat
The nearly $81 million the Inuvialuit Development Corporation invested to Norterra Inc. to keep the Northern Transportation Company Ltd. [NTCL] afloat in its final years will never be paid back, but officials say they'd given up on that money years ago.
Norterra filed bankruptcy documents in Edmonton earlier this month. Seven creditors have filed claims totalling $83.1 million. The Inuvialuit Development Corporation, which owns Norterra, is the largest claimant with $81 million. The second-largest claimant is for $2.2 million from pension creditors.
"We wrote it off years ago, over a number of years," explained Mark Fleming, the chief financial officer for the Inuvialuit Regional Corporation, which owns the development corporation. The development corporation, in turn, owned Norterra.
At one time, Norterra was the management company responsible for Canadian North, NTCL, and heavy-equipment manufacturer Weldco-Beales. NTCL was the company responsible for running a barge up the Mackenzie River filled with food and supplies for the communities in the summer months. How the various businesses related to each other can best be explained by this old family tree.
"NTCL provided vital service to many of the [Inuvialuit] communities. We needed to keep those services going to make sure that people received the food," Fleming said. "This [money] was put in over a number of years, none of it was recent money. But we do not expect to receive it back."
The Inuvialuit Development Corporation invested the money between approximately 2008 and 2013, and the corporation took steps to limit the effects of not getting those investments back, he said.
NTCL owed more than $100 million when it declared bankruptcy. Norterra was responsible for paying off as much of that debt as possible. The $83 million is what is left over from that process, according to Fleming.
In early 2017, Norterra turned over control of Canadian North and Weldco-Beales to the development corporation directly.
As a whole, the Inuvialuit Regional Corporation reported $83 million in profits last year before it paid taxes. Most of that money came from Canadian North and Weldco-Beales.
"With NTCL gone and Norterra no longer needed, this was a decision the Norterra board had to make," he said. "Without having any assets left, [the board] really had no other choice."
A spokesman for the company handling the bankruptcy process says the proceedings will take several months to complete.
With files from Mackenzie Scott