Site C consortium member Petrowest has waiver extended by lenders until March 31 2016


Here’s a little something interesting to gnaw on while I’m working this other story.

In November 2015, the BC Government and BC Hydro awarded a $1.5 Billion contract to the Peace River Hydro Partners, of which Petrowest Corporation is included.

Yet curiously by December 2015just a month after this Site C contract was awarded – the Financial Post was reporting that Petrowest was operating on borrowed time from its lenders:

CALGARY — Petrowest Corp. is operating on borrowed time from its lenders.

The oilfield and forestry services company says it has until Jan. 18 to provide a 2016 budget to get temporary relief from some of its debt commitments.

Most of the commitments relate to Petrowest’s adjusted EBITDA, a measure of earnings that has fallen dramatically.

As of Sept. 30, the Calgary-based company had generated $10.62 million of adjusted EBITDA for the first nine months of 2015, down from $27.6 million in the comparable period of 2014.

One of Petrowest’s covenants is to maintain a minimum of $20.7 million adjusted EBITDA for four consecutive quarters.

Petrowest’s lenders have granted waivers on its debt covenants until Feb. 29, subject to the budget condition.

Yesterday, Stockhouse reported that lenders have now extended the debt waiver to March 31st, giving Petrowest some breathing room while they work with lenders:

Which begs the question: What kind of due diligence does the BC Government and BC Hydro perform when it comes to potential bidders? Because for me, a company that has lenders making noise would be a big red flag…



This out today from BIV:

One email from BC Hydro CEO Jessica McDonald on November 16, 2015, suggests there was a bit of a rush to finalize and announce the awarding of the contract.

“There is a very tight timeframe for an announcement of this award,” McDonald writes in an email. That urgency is not explained as the following sentences are redacted.

Question: Would the above situation regarding Petrowest, have been a mitigating factor in the rush to award and finalize this contract? Because a contract in the hand certainly soothes lenders….

33 thoughts on “Site C consortium member Petrowest has waiver extended by lenders until March 31 2016

    1. Individuals connected with the company probably contributed.

      Ah the BC Liberals……soooooo fiscally prudent, so budget concious, so incredibally inept in every way……
      14 months to watch Christy Clark babble incoherently again and again and again.
      Its almost as amusing as Donald Trump.

      PS. Does anyone know why shes wearing a ‘Haida tent” shoulder shawl” these days? I keep looking to see if she has an arm in a sling……


  1. Interesting to note that BC Hydro has to borrow funds to pay the Government their dividend and assist with the “balanced” budget!
    the rest of us get a rate increase unless you are a mining company


  2. Pirates and Thieves

    What kind of due diligence? The worst kind. Pfft. Take LNG For example…

    If Christy and the Pirates had done due diligence, proper studies and investigation on Petronas they would would have been aware of multiple red flags – raised world wide in many countries and by international banks, and trade agencies. North America – USA (SEC), Middle East – Saudi Arabia, Europe – France and Switzerland. All duly announced by government agencies and reported in major news and business papers and business journals.

    Christy/Colman would have found that in dealing with Malaysia they would be dealing with the fifth most corrupt country on the planet. A government with a record of long standing and on going bribery and corruption, money laundering, slush funds, price fixing, lack of transparency… you name it. The state owned and directed sovereign oil company Petronas reflects the same history and notoriety.

    I think they knew all this but choose to sell out to the thieves at any cost .

    It seems sadly fitting that we have Pirates doing deals with pirates. If a deal gets done and this Fracking LNG goes ahead all the crooks win and the citizens of BC will suffer for generations.

    Just as we all will if Site C is forced through. So much for due diligence.

    Liked by 1 person

  3. Don’t know why you’al are working yourself up about this. Back in December, Hydro CEO Jessica McDonald stated “We’re going to get great value for this money” of the $1.5 Billion contract awarded to Acciona (Spanish), Samsung (Korean) and Petrowest (Albertan) and “the project will come in on time and on budget”!
    Anyone with this depth of insight must be able to see into the future, ….or be capable of adjusting the schedule and budget of the project to fit reality.
    The matter of Earnings Before Interest Tax Depreciation & Depreciation should be an issue between the consortium and its lenders, unless of course Hydro is considering financing the whole thing al a Port Mann. And THAT shouldn’t prove a problem, given the extent Hydro is able to generate debt! What’s another Billion or two?

    As an aside, from my limited knowledge and perspective, this Project should never have seen the light of day! And if I’m ever proven wrong, it should never have been built by foreigners.


    1. its being built by foreigners so they can bring in TFWers. How else would they be able to build it for the amount “quoted”.


  4. It is my guess that the Petrowest lenders have granted a stay of execution because they and Petrowest likely think the BC government/BC Hydro will provide a contractual guarantee that satisfies the lenders as to security of their loans. Lending might not be to the corporation but only to the contract. This kind of corporate welfare is what the BC cabinet understands and embraces.


    1. Bingo. Finance ministry and Hydro spend a fair bit of time monitoring this yesterday and I received an email from Petrowest executive VP of Investor relations & Corporate Development Nik Kiefer asking if I would like more information on the most recent press release – no need Nik, I understand it quite well.


  5. Rob Shaw just on CBC radio talking about Site C. BC mining slowing down, LNG looks unlikely. So why do we need Site C? I dunno! Hydro rates are going up as it is.


  6. guess the contract to the company just bailed them out. Their lenders will be happy, they got a Site C contract. of course, we do want to know how they connect to the B.C. Lieberals and or any of their friends. We do know some one threw Christy a nice fund raising party in Calgary prior to the last election. Sometimes its just friends of friends.

    At some level it would be very funny, if the whole thing crashed because of bankruptcy or some such thing.


  7. If BC really needed any extra power for LNG compressor Trains or any mining ventures, which almost all are located in NW BC, all we require is a short power grid constructed to SE Alaska, just across the border north of Prince Rupert to access 3000 MW of clean green power from the Alaskan Energy Consortiums Hydro Electric and Geo thermal they cannot presently connect to the International grid. AEC has been asking for this grid for over a decade. BC Hydro executives deny the AEC has communicated this request to them yet it is all on record.

    This grid would cost a fraction of the cost of Site C and is at the location the power is said to be required; Prince Rupert/Kitimat. And there is already twice as much power available than site C will produce.


  8. Here’s an interesting read – BC Hydro wont release the amounts of the other bids for SIte C. And emails with Jessica McDonald suggest a rush to award and finalize the contract.

    In the context of my story above, would the pressures from Petrowest lenders to meet the covenants of their terms have been a pressing matter for the govt to get this done quickly to salve the lenders?


    1. Makes sense! And they wouldn’t want the general public to know. They’ve been taking lessons from the Lieberal government!


  9. This explains things:

    “NDP leader John Horgan criticized (new BC Hydro CEO) McDonald’s appointment, saying her time as Campbell’s deputy minister made her an architect of the clean energy and self-sufficiency policies that have left BC Hydro immersed in debt and problems.

    “They created the mess, Ms. McDonald was there at ground zero and I just don’t think it’s the right choice,” Horgan said.”

    Horgan is referring to the Clean Energy Act, which exempts Site C, and new IPP power, from being cancelled by the BCUC. McDonald is now ramming through Site C.


    Innergex owns IPPs in BC.

    BC Hydro owes over $56 billion for IPP power.


  10. Well, well well! I’m surprised it took this long for the farce to become apparent. It was obvious from the beginning that this charade was just a matter of convenience to give the illusion of some semblance of credibility. Didn’t work though, just like the project won’t work. NOW, will you shut it down.
    Hope Chrispy’s next job isn’t running a lemonade stand. Cuz it won’t fly if she’s in charge.


  11. […] It was over a year ago that I first reported on the difficulties facing Site C contractor, Petrowest… and the oddity of the company being qualified to even be awarded a contractor.… […]


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