VANCOUVER — Online building materials seller BuildDirect.com Technologies Inc. has been granted court protection from creditors as it tries to recapitalize or arrange a sales transaction.
The Vancouver-based company's court-appointed monitor, PwC Canada, says it obtained an order under the Companies Creditors Arrangement Act on Tuesday.
It says BuildDirect has negotiated a US$15-million loan from significant investors to continue its operations while it works on its financial restructuring.
In an affidavit posted with the B.C. Supreme Court, BuildDirect vice-president of finance John Sotham says the company founded in 1999 has generated significant revenue but has not been profitable, instead relying on debt and equity financing to fund operations.
He says BuildDirect, which employs most of its 224 employees in Vancouver, grew revenues to $120 million in 2014, adding it had $72 million in revenue through the first nine months of 2017 but its costs exceeded revenues by about $2.6 million per month.
Sotham says founder and CEO Jeff Booth resigned last Friday.
The company owes its secured lenders about $75 million and has breached financial covenants in the past year, Sotham adds. He says the immediate cause of BuildDirect's current difficulties is its failure to complete an equity financing expected in mid-October.
BuildDirect also has offices in Waterloo, Ont., and Bangalore, India.
