Refinery proponent seeking bankruptcy protection

The company hoping to build a new refinery in southern Newfoundland said Friday it is seeking bankruptcy protection while it attempts to restructure.

Newfoundland and Labrador Refining Corp. said in a statement it has filed a notice of intent under the Bankruptcy and Insolvency Act to provide "NLRC with a stay of proceedings against actions by creditors while it formulates a proposal for restructuring."

Newfoundland and Labrador Refining has been planning to build what would become the province's second refinery, in Placentia Bay.

The revelations caused the value of Altius Minerals Corp., which is the principal investor in NLRC, to plummet in trading Friday on the Toronto Stock Exchange. Altius share fell $5.12, or more than 41 per cent, to $7.25.

Managing director Brian Dalton said in a statement that engineering giant SNC Lavalin served notice late Thursday that it is asking Newfoundland Supreme Court to have NLRC judged as bankrupt.

"NLRC management is currently working with its advisers to determine the optimum method of restructuring, which may include the sale of its assets. A further update will be provided at a later date once key decisions are made," Dalton said in a statement.

Discussions 'productive': Dalton

Just this week, Dalton told delegates to the Newfoundland and Labrador Oil and Gas Industries Association that he has been seeking new investment in the Middle East, India and elsewhere in Asia.

'"We're at tables, lots of tables," Dalton said Wednesday.

Newfoundland and Labrador Refining had planned to start construction on the Placentia Bay site this summer, with a view to having the refinery in production by 2011.

In his statement, Dalton said that "with the exception of its dispute with SNC Lavalin," the company has had what he described as "productive discussions" with creditors to restructure its debt.

Dalton said the company's problems with financing are "due to the deterioration of global capital markets."

He said the company will fight SNC Lavalin's applications.