A trucker with Tlicho Ventures West says nobody is picking up the phone and no one knows if they’re getting paid after his employer’s parent company, Tlicho Investment Corporation, sought creditor protection last week following “significant losses” in past years.
Jeff Samson, a lease owner/operator who has been with Ventures West for four years and who owns two trucks, said he first heard about the company going under Tuesday morning.
“I literally just found about it yesterday and it has been a ton of information flooding in,” he said, noting that the company had been fixing the tires on his truck and he was expecting to go back to work. “So I tried to get a hold of work and was trying to see if it was all good to go to get back to work. I tried dispatch and the office and nobody answered.”
Samson said working with Ventures West has taken him all through the North from Edmonton to Whitehorse. He has also done some pre-fill work on some of the winter roads in and around Yellowknife. He found out from a trucking buddy that the Sherwood Park-based operation had shut its doors.
“I’m not very impressed with Tli Cho right now,” he said. “I understand their circumstance but some notice would have been appreciated and not knowing if we are even going to get paid is stressful. Being the owner of two trucks means every cent counts.”
Tlicho Investment Corporation, which is the parent company of 22 subsidiary companies, filed an affidavit with the Court of Queen’s Bench of Alberta on Nov. 27 stating that its northern transportation companies Tlicho Ventures West and LandTran Transport Ltd. are in “urgent need” of protection under the Companies Creditors’ Arrangement Act due to financial losses, including more than $18 million over the past two years.
“The Transport Companies have experienced years of financial difficulties and cannot continue to operate without extensive financial report,” reads the affidavit.
“In order to pursue a restructuring that will maximize value for stakeholders and to pursue an orderly wind-down of operations, the Transport Companies require the flexible relief that is available under the Companies’ Creditors Arrangement Act.”
The affidavit, filed by Mark Brajer, chief executive of the Tlicho Investment Corporation, states there are 40 employees with the transport companies, 37 of whom are with Ventures West LP and three others with Tlicho Landtran. If an initial order is granted by the courts, it will mean the layoff of the “majority” of those employees.
Brajer further states that without creditor protection, the jobs of 410 other employees within the group of Tlicho companies could be in jeopardy, leading to “significant negative consequences for the Northern people, businesses and communities.
“Continuing to operate the Transport Companies’ business under the circumstances is not tenable,” Brajer states in the affidavit. “The Transport Companies need to undergo a sales process in order to maximize shareholders and to conduct an orderly wind-down of their operations while mitigating risk of destabilization of the other Tlicho companies.”
News/North has made several attempts by phone and email to reach Brajer since the weekend to confirm a news tip that the companies were seeking creditor protection and to learn how this would impact employees and northern communities.
Those attempts were unsuccessful as of Wednesday evening.
Emails and phone calls have also been sent to the Tlicho government, which is among the major creditors that has propped up the company with financial support, but all questions were referred to Brajer.
Cabin Radio broke the news on Tuesday night that the company had lost more than $18 million over the last two years. CBC North also reported on Wednesday that Denesoline, which owns 10 percent of the company, is filing a civil lawsuit against the Tlicho Investment Corporation for mishandling management of the corporation.
The affidavit document by Brajer, which can be found on the MNPdebt.ca website – a source which specializes in assisting companies restructure and attain long-term financial stability – states the company’s revenue is dependent on a handful of customers for a bulk of its earnings during a very short winter season.
Most of those customers are large company clients with winter road contracts for hauling cement and fuel to remote areas such as the diamond mines.
The affidavit states that among those contracts include a fuel contract for Diavik Mines that Ventures West has held for 10 years and which has represented about 27 per cent of its entire revenue. The contract was expected to be renewed for five years in 2019.
But after bidding for a new contract with revised pricing, the company failed to get the extension. It was estimated that lost contract would mean a net loss of $9.3 million in 2020 and would compound “years of significant losses already,” according to the affidavit.
“Given the long term financial difficulties faced by the Transport Companies, the Tlicho government and TIC engaged MNP Ltd. to assist them with constructing a strategic review of operations,” the statement reads. “Given their unsuccessful bid for the fuel contract, it was determined the transport companies have material excess capacity and it is necessary to downsize their operations.”
In 2015, News/North reported that the Tlicho government became the dominant shareholder of Ventures West by jumping from 60 per cent to 90 percent ownership. The remaining 10 percent is owned by the Deneosoline Corp.
“Since the acquisition of the majority interest in the Transport Companies by TIC, the Transport Companies have withdrawn the net amount of approximately $37.6 million from the TIC account,” the affidavit reads. “TIC and other Tlicho companies have therefore provided $37.6 million in inter-company advances to the Transport Company that have not been repaid.”
Problems getting goods to customers
Samson said he began to notice, especially this year, that the company was having problems getting goods to customers and that it was to due to the continued breakdown of equipment and repairs that were not happening quickly enough. Although the upkeep of his trucks are his responsibility, the trailers are the company’s.
“One trip about last month I got up to Enterprise and blew a tire in the trailer,” he said. “When I called the service mechanic at Ventures West, they said ‘yeah, we need to find the money first before we can fix it.'”
A Hay River company was located to help while he was stranded, but he was fronted the bill. In other instances since then, accounts for washing his truck’s trailers were also closed.
“The deal as owner/operators was that as long as our trucks were connected to the trailers, they would pay for the wash,” he said. “We couldn’t even do that toward the end because they weren’t paying their bills.”
In yet another instance, Samson said the company laid off its mechanics earlier in the year and sub-contracted the work to a mechanic in Edmonton to prepare the trailers for the winter road season.
“Again, they weren’t paying their bills, so this mechanic shop held all the trailers,” he said. “It meant that if someone’s trailer broke down, they were supposed to get another trailer, but they couldn’t do that. So they had no choice to get them fixed, but they couldn’t do that either because they had no money.
“It was just a fight all the time to keep going.”