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Winnipeg Free Press - PRINT EDITION

$1-B lifeline created for troubled firms

By: Staff Writer

20/08/2009 1:00 AM | Comments: 0

OTTAWA -- Canadian companies facing bankruptcy are being given access to a new $1 billion lifeline from Ottawa and major financial firms to provide breathing space to restructure operations and return to solvency, Export Development Canada said Wednesday.

The EDC said it has agreed to become the top contributor to a new fund that would act as the bank of last resort to struggling companies that are unable to obtain credit through normal channels.

The Crown corporation has put up $450 million and Toronto-based Brookfield Asset Management (TSX:BAM.A), the former Brascan conglomerate, another $100 million to the fund.

Other investors include the Canadian Imperial Bank of Commerce (TSX:CM) and Sun Life Financial Inc. (TSX:SLF), one of Canada's largest insurers.

Brookfield will manage the fund and provide so-called debtor-in-possession loans and other specialty financing to insolvent Canadian companies who need money to pay the day-to-day bills while they restructure or reorganize.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition August 20, 2009 B8

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