Laurentian faces big debts

SYDNEY— Over $600,000 owed in property taxes, more than $600,000 owed to the federal government and Laurentian Energy Inc. has been in restructuring mode since December.

The company owned by some of Sydney’s highest rollers appears to be shaking at its very core.

“This is one of many debts they owe and I’m pretty sure they owe the province money as well,” Enterprise Cape Breton Corporation spokesman D.A. Landry said of the $640,000 owed to the federal Crown corporation.

The Chronicle Herald was unable to confirm if the company owes the provincial government money.

Landry made the remarks Tuesday during a telephone interview conducted following the release of a notice of a Cape Breton Regional Municipality tax sale that is slated to take place on Feb. 23. Slightly more than $636,000 in property taxes is owed on the 35 properties owned by Laurentian Energy at the Point Edward industrial site on Sydney Harbour that are on the list.

In December, company president Jim Kehoe said Laurentian Energy had to restructure because of financial problems. The company owns the 160-hectare site touted as the future site of a bulk container terminal, a metal fabrication shop and the industrial park.

“Restructuring has become necessary because of financial problems, but this will be the solution,” he said in December.

While details were still being fleshed out, Kehoe said at the time the metal fabrication shop and industrial park would remain as one company but the site that may hold the bulk container terminal would stay in the hands of the original shareholders, including local businessmen like Kehoe, Martin Chernin and Hugh Tweedie. Membertou First Nation and New Dawn, a local community development non-profit organization, would also retain interest.

Company lawyer Dwight Rudderham said late Tuesday the property taxes owed to Cape Breton Regional Municipality are very much a part of the restructuring.

The dredging of Sydney Harbour is nearing completion but hopes for the establishment of a bulk shipping pier at the site may be dimming.

“This company has been struggling for awhile and they’ve been trying to get new commercial activity in the industrial park,” said Mayor John Morgan.

“As I understand it, there are internal discussions going on right now to resolve a number of issues. Laurentian Energy was formed to take advantage of the offshore potential but that never did materialize and that caused problems for the company, largely because their principal business model didn’t work out.”

Even though debts are high, Morgan said he still believes there is a future for Laurentian Energy.

“Either in its current form or in a new company on that site, there is still significant hope with the ship building contract awarded to the province,” he said.

The mayor said there was a great outcry back in the late 1990s when Enterprise Cape Breton Corp. sold the property to Laurentian Energy, since, at the time, the company was comprised of mainly local businessmen.

Although the asking price was in the vicinity of $3 million, the final amount of the deal is still unclear.

Landry said the agreed upon price changed because it was based on a “complicated formula.”

The $640,000 owed to the federal Crown corporation is what remains of the property purchase.

(mmacintyre@herald.ca)

Article source: http://thechronicleherald.ca/business/53050-laurentian-faces-big-debts