Toronto Condo Builder Urbancorp Files for Debt Restructuringby
Urbancorp also plans to sell assets to pay down debt
Developer has more than 1,000 homes under construction
Urbancorp, one of Canada’s largest residential developers, has filed for a restructuring that includes selling off assets as the company seeks to dig itself out of debt.
The company has filed for the restructuring under the Bankruptcy and Insolvency Act and is seeking court approval to sell assets "to maximize real estate values for the benefit of creditors and other stakeholders," the Toronto-based firm said in statement Friday.
“We determined, after much consideration and consultation, that a court-supervised process is the best way to deal with current cash flow issues,” Chief Executive Officer Alan Saskin, said in the statement. “This will allow us to reduce debt in an efficient manner while continuing to focus on our core business."
Urbancorp raised 180 million shekels ($48 million) through a bond sale in Israel last year. The bonds plunged to a record low this month after the company announced a delay in 2015 results and the resignation of legal advisers.
The restructuring focuses on six Urbancorp entities in Toronto, which were created for each property. They include the St. Clair Village townhouse project in midtown, which its website says is sold out, and Downsview Park, one of Toronto’s largest residential developments at 300 acres. It also includes Urbancorp Toronto Management Inc., the firm’s property management company.
Tarion, Ontario’s home warranty provider, said earlier this month it’s looking to revoke the company’s registration after it failed to meet financial requirements. If revoked, Urbancorp wouldn’t be able to build properties. The company has appealed.