July 19, 2010

Modular home manufacturer Winalta granted extension of creditor protection

RICHARD GILBERT

staff writer

Modular home manufacturer Winalta Inc. was granted its second extension of creditor protection earlier this month to develop a restructuring plan.

The Court of Queen’s Bench of Alberta, Judicial Centre of Edmonton granted the extension until August 6, 2010, under the Companies’ Creditors Arrangement Act (Canada) (CCAA).

The court has approved the sale of 29 homes and lots plus three vacant lots in Sylvan Lake, Alberta.

As a result of this sale, Winalta will receive more than $3.8 million.

The completion of this transaction is expected this month.

The court also approved the sale of 118 acres of residential property in Estevan, Saskatchewan.

From this sale, Winalta will receive $1.6 million.

The transaction is expected later this month.

The court has additionally granted Winalta an order relieving it of its obligation to hold an annual meeting of its shareholders within the time prescribed by the Business Corporations Act (Alberta), until the court orders the annual meeting to be called.

On April 26, Winalta applied for and obtained its first order from the Courts granting creditor protection under the CCAA.

The company has consulted with its primary lender and continues to work to reduce its debt and fund operations by attempting to sell its non-core assets.

Accordingly, the interim financial results have been prepared on a going concern basis, which assumes that the future operations will allow for the realization of assets and discharge of liabilities in the normal course of business.

In the second quarter of 2010, Winalta had a net loss of $5.2 million.

The company said the loss was the result of reduced overall revenue combined with the losses incurred on discontinued operations and production inefficiencies related to non-production at the Acheson manufacturing facility.

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