Nemaska Lithium Sells Assets, Leaves Nothing For Shareholders

Nemaska Lithium (TSX: NMX) has reached a conclusion in its ongoing CCAA proceedings, with the result being that shareholders, unsurprisingly, are left with nothing. The company announced that it has accepted a sales proposal, with its main assets being purchased by a group that consists of the firms largest secured creditor, Orion Mine Finance, Investissement Québec, and the Pallinghurst Group.

While the news release put out by the company this morning is rather complex, the short of it comes down to the fact that current shares in Nemaska will be exchanged for what is referred to as “Residual Nemaska Lithium”. The assets remaining will consist of certain cash amounts, which will largely be used to enable a plan of compromise or arrangement with the firms remaining creditors. The Residual Nemaska Lithium will continue as the reporting issuer following the asset purchase.

On the operations side of things, the group will acquire the Nemaska entities and assets through what is referred to as a reverse vesting order. The sponsors, whom are Investissement Québec and The Pallinghurst Group, will each own a 50% stake in a new entity that will be acquiring the entities and assets of Nemaska. This entity, once out of CCAA proceedings, will then amalgamate with an entity controlled by Orion Mine Finance, to form what is referred to as “New Nemaska Lithium.” The sponsors will then invest up to $600 million in the project to push it forward.

The New Nemaska will then assume at least $146.5 million worth of liabilities, including current secured claims by Orion and Johnson Matthey Battery Materials, from the current public issuer. Current cash on hand with the public vehicle will remain, subject to certain undisclosed adjustments. It should also be noted that the New Nemaska will retain substantially all current employees of the public issuer.

The result of this however, is that New Nemaska Lithium will not be a reporting issuer within Canada – meaning current shareholders no longer receive exposure to it.

If approved by the courts, the transaction is expected to close by October 15, 2020.

Nemaska Lithium remains halted as a result of the ongoing bankruptcy proceedings.


Information for this briefing was found via Nemaska Lithium. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

24 thoughts on “Nemaska Lithium Sells Assets, Leaves Nothing For Shareholders

  • August 24, 2020 2:58 PM at 2:58 pm
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    I sincerely hope this does NOT get approved by the courts. How could they do this to their shareholders. They truly are a bunch of crooks! A class action law suit should be filed against them to block this transaction from moving forward.

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    • September 3, 2020 12:41 PM at 12:41 pm
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      sue them-guy bourassa is a fraud scummer we need to get together and sue for fraud by the CEO.

      Reply
    • November 13, 2020 3:52 PM at 3:52 pm
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      Does that mean our Nemaska Lithium stocks (RRSP) account are worthless ?

      Reply
  • August 26, 2020 3:45 PM at 3:45 pm
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    I found this article by searching for class action lawsuits against Nemaska. As a holder of thousands of now-worthless Nemaska shares, I am highly displeased to learn that the decision cuts loose all common shareholders. How is this even legal? I invested my retirement savings in good faith. I will now get all my money out of Canadian mining stocks, pronto. This is obviously not a high-risk investment, it is some form of pyramid scheme, and because it was done through my RRSP, I can not even claim a capital loss on my taxes!!

    Reply
  • August 27, 2020 6:31 AM at 6:31 am
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    This is daylight robbery.
    Lets see here, total capital raised is approximately Canadian $1 billion. They later found they were Canadian $375 million.
    So total cost required to develop the asset for production is about Canadian $1.4 billion.

    With the current deal, with an investment of just Canadian $190 million plus unto Canadian $600 million they can develop the asset for production.

    So basically the stock holders got ripped off of about approximately Canadian $600 million.

    Reply
  • August 27, 2020 7:16 AM at 7:16 am
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    I lost a lot of money on this Stock. It is clearly incredible to think that the courts could approve this type of theft for shareholders.

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    • October 1, 2020 3:08 PM at 3:08 pm
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      Bunch of crooks. That’s what they are. Hopefully the courts don’t approve and the common shareholders get to own equivalent # of new offspring’s shares.

      Reply
  • August 27, 2020 11:42 AM at 11:42 am
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    If there’s a class action suit, we’re in… this whole thing is appalling!!!

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  • August 27, 2020 7:06 PM at 7:06 pm
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    This is daylight robbery.

    This post fixes some typos in my earlier post.

    Lets see here, total capital raised is approximately Canadian $1 billion. They later found they were short by Canadian $375 million.
    So total cost required to develop the asset for production is about Canadian $1.4 billion.

    With the current deal, with an investment of just Canadian $190 million plus unto Canadian $600 million they can develop the asset for production. So from the current state the total cost to get to production is Canadian 690 million.
    There is Canadian 140 million of liabilities.
    So a total of Canadian 840 million.

    So analyzing
    total cost for development is 1.4 billion which is now being done by a total cost of only unto Canadian 840 million.

    So shareholder ripoff is about Canadian 560 million.

    Reply
    • September 3, 2020 12:38 PM at 12:38 pm
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      fucken sue the scum.

      Reply
  • September 1, 2020 4:47 PM at 4:47 pm
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    What can we do, that court does NOT get approved it. Any idea?

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    • September 6, 2020 10:53 AM at 10:53 am
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      All gone….

      Reply
  • September 2, 2020 3:54 PM at 3:54 pm
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    Unfortunately we common shareholders are left with nothing ! while the secured creditors, and the bigger they are, get to dictate the terms of who gets what – and we common share holders are not even at the table – so that is the first injustice. Second is the Directors and management have to be held accountable for the misinformation – or the lack of information(transparency) published in their annual reports and websites. Cost overruns and lack of capital to bring assets to productions have been plaguing this company for a long time and that information was not disclosed by the corporation, until it was too late – i.e. they did not have money to pay their workers !! The role of the auditors in this whole drama is also questionable.

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    • September 6, 2020 10:59 AM at 10:59 am
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      I can not believe that there is no residual value in the common stocks….are they out of their minds!

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      • September 6, 2020 11:12 AM at 11:12 am
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        The courts will not for this….l believe in our court system for now.

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  • September 8, 2020 11:34 AM at 11:34 am
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    Just checked their 2019 3rd quarter accounts submitted by the auditors of Nemaska. It says that there was about $550 million in share holder equity.
    Approx 847 million shares, and $550 million share holder equity, so approximately each share worth about $0.64
    Now they want to take all the assets from the company belonging to the share holders including cash in bank and paying for free.
    WHO THEY HELL ARE DO THEY THINK THEY ARE FOOLING.

    Reply
  • September 8, 2020 12:23 PM at 12:23 pm
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    https://www.youtube.com/watch?v=liThZjFkXv8
    It wasn’t just the Wabouchi mine that Nemaska Lithium owned. There was another mine just 140 kms away that was also a good lithium resource.
    The Wabouchi mine was 1 km long and a football field wide, was also the best hard rock lithium resource in the world.

    And to take it away from the share holders without having them at the table, without even attempting an equity raise is just ROBBERY.
    And for this to happen in the internet day and age expecting for this to be swept under the rug with the court approval, all this just shows the level of corruption that is present even in CANADA, while they lecture other countries on morals, principles and democracy.

    Reply
  • September 9, 2020 4:30 PM at 4:30 pm
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    This data is listed online by the Office of the Superintendent for Bankruptcies, Government of Canada regarding the Nemaska Lithium re-organization. Contact the parties that have responsibility and jurisdiction to oversee shareholder rights, particularly Rule 61-101 that is meant to protect minority security holder rights.

    Court File Number:
    500-11-057716-199
    Court and Judicial District:
    Cour supérieure, District de Montréal
    OSB File Number:
    0000455-2020-QC
    Date of the Initial Order:
    2019-12-23

    Company Name:
    Nemaska Lithium Inc., Nemaska Lithium P1P Inc., Nemaska Lithium Shawinigan Transformation Inc., Nemaska Lithium Innovation Inc., Nemaska Lithium Whabouchi Mine Inc.

    Court-Appointed Monitor:
    PricewaterhouseCoopers Inc.
    Website:
    http://www.pwc.com/ca
    Monitor’s Representative:
    Christian Bourque
    Address:
    2500-1250 boulevard René-Lévesque Ouest
    Montreal QC H3B 4Y1
    Telephone:
    514-205-5434
    Email:
    Christian.bourque@pwc.com

    Reply
  • September 15, 2020 2:19 PM at 2:19 pm
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    Looks like the lawsuit is only for shareholders within Canada, what about those of us in USA that own NMKEF?

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  • September 16, 2020 6:47 PM at 6:47 pm
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    The lawsuit is for all shareholders.
    The terms that this group is fighting for are the same for all same for all shareholders.

    Reply
  • September 16, 2020 7:10 PM at 7:10 pm
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    We are the Nemaska Lithium shareholder group on facebook. nmxinvestorsgroup@gmail.com. We are collecting proxies for this stock and are organizing a class action. Join us. send us an email. Alcide Gour

    Reply
  • October 15, 2020 7:18 PM at 7:18 pm
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    where is that piece of garbage guy bourassa he conned everyone stole the money and now is hiding out

    Reply

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