Adam Gant insists that anything and everything that will bring investors and stakeholders the best outcome is on the table for discussion — including his own position as CEO — as the League group of companies goes through a monitored restructuring process.
In an interview Tuesday, Gant said whether his detractors chose to believe it or not, the goal is to come out of restructuring a stronger, more organized company with shareholder value intact.
“As much as people are unhappy with this happening and are likely worried and concerned, we are looking to get the best outcome for everybody,” Gant said. “There is no outcome in my mind I would resist if it did get everybody the best outcome.”
When asked if that could mean changes at the executive level, including his own position, Gant was forthright.
“All of that is on the table for review. There’s nothing that is sacred. What we are doing is coming up with best game plan, which includes how we staff, manage and run the business going forward. All of those things are up for evaluation,” Gant said. “If there was somebody better, that was more committed to getting the most out of this and better to execute the plan, like I said, there is nothing sacred for me.”
Citing insufficient cash on hand to meet its obligations, the League group applied to the court and received approval last week for creditor protection under the Companies’ Creditors Arrangement Act.
CCAA protection gives League an initial 30-day period to work on restructuring and developing a plan of arrangement for creditors and investors under the supervision of monitor PricewaterhouseCoopers. As a rule, the courts will continue that protection as long as a company demonstrates it is likely to file a plan. There is no limit on how many extensions a court may allow.
While Gant concedes most people will look at CCAA protection as a negative, he suggested it will help the company achieve its goal of simplifying corporate structure which will be better for shareholders.
The League group of companies lists 105 entities in its complex structure. It has more than 3,000 investors who have invested about $300 million in its investment vehicles. League is also behind Capital City Centre in Colwood, which has a projected cost of $1 billion.
“A lot has to change. We were trying to make a number of changes but [CCAA] obviously does force changes and that is what’s needed,” he said.
In his court filing, Gant said a restructured League could be simplified into three core businesses: asset management, wealth management and real estate development, the company would divest underperforming assets, find stable funding to reduce interest charges and look at going public to increase equity investment and decrease credit requirements.
The CCAA process, monitored by PwC, will look at all resources on hand, determine what assets should be sold, held or refinanced. The plan that emerges will be presented to stakeholders for a vote.
Gant said it’s far too early in the process to determine what that plan will look like and when it might be ready. “But the one thing about this process is investors do get to decide. They do have a voice. They do get a say,” said Gant.
As for what he would say to investors who are concerned about their money, Gant said the process works for them. “This process is meant to protect assets while we go through and come up with a reorganization plan and it includes PwC oversight and analysis,” he said. “This process is about getting the most value for all those involved which is why we chose to go this route.”
Whether the process will appease detractors of both Gant and League, Gant couldn’t say. “They could see what we have been trying to do to retain value, increase value and save value. That might help give them a perspective on the effort we have put in and the work done,” he said. “But at the end of the day, probably none of that matters to them — they want to see the result and what that outcome is.”
