Union of Two Theories
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It looks like the outcome hasn't followed a path we expected. More than one of us have a "hunch" that something occurred that we missed. Something isn't on the up-and-up so to speak. Here's a union of two possible explanations, both having been discussed on the board at one time or another.
1. Several weeks ago a matter discussed was, "Why has it taken so long for the Sarnia facility to get to 100% capacity in production?" In fact, it never got to 100%. The Sarnia facility came online in Aug 2015. By Feb 2016 it was running at only 25% capacity. Between Feb 2016 and Feb 2018 the facility only got to 70% capacity. Rick Eno became CEO in the summer of 2017, ten or so months before filing BK, then seeking CCAA protection. Q: Was there a flaw in the construction of the facility that prevented it from achieving 100% capacity? One person raised the issue of the designers using the wrong kind of stainless steel in its construction. Different acids impact stainless steel differently. Q: Was this enough to induce the Board of Directors to seek to sell the facility, so they hired Eno to take on this, if they couldn't remedy the facility fast enough to get beyong OLs? In short, by summer 2017 was the Board of Directors already in frame of mind to sell Sarnia? Even liquidate BioAmber?
2. Cut to Visolis nosing around Sarnia at some point in late 2017, early 2018, looking for land to buy for its own facility. Lo! They meet Rick Eno, who says, "I gotta facility for you!" My guess is that they met before the BK filing. Whether before or after the BK filing is moot now, but my guess is that this deal might have been planned from the beginning, so ... be that as it may, Visolis didn't have enough money to purchase the BIOA assets outright, so they sniffed around and, ultimately, they made a deal with LCY, who made a deal with KKR, to arrange to purchase the Sarnia Facility as cheaply as possible. For, at present, the REAL OWNER is actually KKR, through its stock holdings of LCY, who's in a joint venture with Visolis. Now Visolis already has its intellectual property. It has to be associated with Berkeley research in some way. The BIOA patents may be 5-10 years behind the times, so to speak. Technology can move quickly. Really. So Visolis didn't need to pay a lot for the patents. Of the 270 patents, it may be that scientifically, 210 are moot, or outdated, or not viable economically. So that accounts for the lowball price for BioAmber, Inc. the USA component of BioAmber. Visolis didn't need all of them.
Conclusion: Here we are. We have one possible explanation for how everything went down. The explanation fits the facts. What we don't know is whether the PWC valuation of the Sarnia Facility was accurate. If is wasn't, then we're in trouble. If it was on target, then we might have expected Visolis to pay fair market value for Sarnia. It may also be the case that BioAmber Canada might control some intellectual property developed by the Sarnia team that has greater value than the USA company controlled. So the last word hasn't been spoken on the intellectual property issue.
What we need to know is, of course: What was the Sale Price of the Canadian Assets. AND WHY IS THAT SO SECRET?? It shouldn't matter now whether we know or not.
Anyone have a thought or two on this?
