Court approves N.W.T. gov't purchase of NTCL assets, with cost rising to $7.5M
Gov't now owns 12 ships, 72 barges, a Hay River shipyard and other remnants of floundering shipper
The Northwest Territories government is now the owner of 12 ships, 72 barges, a shipyard in Hay River and various other remnants of Northern Transportation Company Ltd., which is headed for either bankruptcy or dissolution.
On Thursday afternoon, the Court of Queen's Bench of Alberta approved the government's offer for the assets, which are being sold off by NTCL in an effort to pay back some of its $140-million debt to a trio of banks.
The government's offer, originally set at $4.5 million, escalated to $7.5 million once the bidding process was over.
The government had been bidding alongside an Edmonton company, 2006647 Alberta Ltd., which originally had put in a lower bid of $2.2 million.
The court's selection of the N.WT. government as the winning bidder paves the way for the government to begin planning the sealift of crucial materials — especially fuel products — to communities down the Mackenzie River and along the Arctic coast next summer.
John Vandenberg, an assistant deputy minister in the Department of Public Works and Services, told CBC News Wednesday that the first step towards that goal would likely be a request for proposals from companies interested in providing the service using the now-government-owned vessels.
He said the government is not interested in becoming a marine transportation company itself.
It's not clear how much it will cost to contract out that service.
The territorial government is expected to issue a press release Friday.
NTCL pensioners will see some money
The day also brought good news for over 200 NTCL pensioners represented by the Public Service Alliance of Canada.
Lawyers for the banks, NTCL and PSAC agreed in principle that the proceeds of the sale to the territorial government — and the proceeds of any other sales to drum up cash for the banks — will be shared between the banks and the pension holders, who are facing a $21-million deficit in their pension plan.
"It's been a great day for the pension plan," said Susan Philpott, the laywer representing PSAC.
The exact split of proceeds between pension members and the banks still needs to be determined on Friday.