Budget Waste to Start Comprehensive Financial Restructuring
BWI Holdings, Inc. [[BWIH.OB]] would like to update its shareholders on the state of the operations of Budget Waste Alberta, Ltd, our wholly owned subsidiary in Canada.
As a consequence of the global financial crisis, Budget Alberta is suffering the same types of financial issues as so many other businesses, including shortage of affordable credit from banks and slow or failed payment from customers. In order to insure that the assets and business of Budget Waste are properly protected for our shareholders, your board of directors has elected to seek protection for Budget Alberta from creditors under the CCAA (Company Creditors Agreement Act ) process in Canada in order to reorganize the business.
This process is only taking place in Canada for Budget Alberta, our subsidiary, and is not for BWI Holdings Inc., the public parent company in the US.
Budget Alberta has sufficient cash on hand to fund ongoing operations, and its business will continue without interruption.
This decision to file for creditor protection is being implemented by Budget Alberta because of the extremely high interest rates Budget Alberta has been paying on equipment leases that have been in place for some time and Budget Alberta’s challenge with attempting to secure refinancing of these leases with bank debt or other financings at current market rates in an environment where lenders are not lending.
Under CEO Jim Can, the company embarked on an ambitious turnaround in 2008 that involved cutting costs, eliminating expenses, reducing payroll, and focusing on key markets, all of which allowed Budget Alberta to begin operating on a positive cash flow basis. However, as the global recession deepened, Budget Alberta’s customers began delaying payments, some have gone out of business altogether without paying Budget, and the downturn in housing construction and oil & gas projects, typical market strongholds for Budget Alberta, all have led to a severe tightening of cash. “Budget Waste, Inc. must secure sound financial footing,” said Jim Can, CEO. “This step to give us protection from claims of creditors and to allow Budget Alberta to restructure its debt is imperative so that Budget Waste can build on its core strengths and be focused and financially sound in the coming months and years.”
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