LCY Chemical purchases BioAmber assets, Sarnia biorefinery

By Erin Voegele | November 05, 2018

LCY Biotechnology Inc., a division of Taiwan-based LCY Chemical Corp., has purchased the assets of BioAmber Inc., a bankrupt renewable chemicals company that built a biobased succinic acid plant in Sarnia, Ontario.

On May 4, 2018, BioAmber announced it had filed for Chapter 11 bankruptcy in the U.S. The company’s two Canadian subsidiaries, BioAmber Sarnia Inc., and BioAmber Canada Inc., made similar filings under Canadian bankruptcy laws. At that time, the company indicated it planned to strengthen its financial heath and solidify long-term business prospects. 

On June 18, the company announced it had had received formal approval from a court in Quebec for debtor-in-possession financing that was to enable a sales and investor solicitation process (SISP), which began June 1. It also allowed the Sarnia plant to continue operations. The SISP process, however, concluded without an acceptable offer being received from a qualified bidder.

On July 30, BioAmber announced, that subject to court approval, it would solicit liquidators to bid on the acquisition and disposal of the company’s assets, including the Sarnia plant. At that time, the company also said it would continue to actively engage with qualified bidders and other interested parties to determine if a transaction that would result in the continuation of the company’s operations was still possible.

In early August, BioAmber announced that following a court order issued on July 31, the company, along with its monitor, PricewaterhouseCoopers, had initiated a liquidation process pursuant to which offers would be solicited from liquidators and/or strategic buyers to proceed with the liquidation of the company’s assets or a recapitalization transaction with the goal of realizing the created value on behalf of the company’s creditors. Binding offers were due Aug. 21, and the company said it aimed to close the transaction by Aug. 31.

On Oct. 25, PWC issued a press release in its capacity as the court-appointed monitor for BioAmber announcing that the company completed the sale of certain of its assets to LCY Biotechnology as of Oct. 22. “These assets comprised all of the company’s assets, save and except for the cash, accounts receivable and inventory of the company, and also excluded certain U.S. based office equipment,” said PWC in the release. “The purchaser did not seek the assignment of the company’s contracts, which meant that certain intellectual property under license from third parties was also not transferred to the purchaser.”

The transaction was approved by the Quebec Superior Court of Justice on Sept. 18 and by the U.S. Bankruptcy Court for the District of Delaware on Aug. 9. PWC said the liquidation of BioAmber’s assets will result in little to no residual value for non-secured creditors and no residual value for equity investors.

BioAmber filed for an initial public offering (IPO) in May 2013 and began construction on its Sarnia plant in September of that year. The facility, which produced biobased succinic acid, began operations in October 2015.