Jul 22, 2021
BlackRock and Canaccord in advanced talks to buy Bridging
Bridging Finance, Sean McCoshen sued over Alberta-Alaska rail plan
Funds managed by BlackRock Inc. and Canaccord Genuity Group Inc. are in advanced talks to buy Bridging Finance Inc., the private lender that was seized by Canadian regulators amid an investigation of its top executives, according to people familiar with the matter.
BlackRock funds and Canaccord have reached out to regulators to put in a bid for the firm, which had about $2 billion (US$1.6 billion) under management as of December, the people said, speaking on condition they not be identified because the matter is private.
Bridging would continue as a going concern and the new owners would manage the existing funds on behalf of its clients, the people said. There are other bidders interested in the company and there is no guarantee that a deal with BlackRock and Canaccord will be reached, they said.
BlackRock is a creditor in the case. Last year, Bridging tried to raise money to refinance an existing facility with BlackRock and to get additional liquidity at the corporate level. Bridging tried to raise $100 million in debt to refinance a $70 million existing facility from BlackRock, David Sharpe, then Bridging’s chief executive officer, said at the time.
PricewaterhouseCoopers took control of Bridging this spring at the request of the Ontario Securities Commission, which says it has evidence of mismanagement and conflicts of interest -- including that Sharpe received undisclosed payments into his personal checking account from a company related to a Bridging client. PricewaterhouseCoopers fired Sharpe in May.
The OSC’s investigation has not concluded and the allegations have not been proven in court.
PricewaterhouseCoopers did not immediately reply to requests for comment. BlackRock declined to comment. Canaccord representatives were not available for comment.
In a report last month, PricewaterhouseCoopers said that in order to maximize value to investors, it planned to pursue a sale process to market some or all of the loan portfolio and assets of Bridging. Any sale would have to be approved by an Ontario court.
Toronto-based Bridging lends to small and mid-sized companies involved in everything from milling flour to delivering groceries. It attracted a following among high net worth investors with promises of steady gains from its loan portfolio.
Those investments are now frozen, and it’s unclear how much will be recovered after the company emerges from receivership. Among other ventures, Bridging lent money to Alaska-Alberta Railway Development Corp., the proponents of a railway from northern Canada to Alaska that was touted by Donald Trump when he was president. The company filed for bankruptcy protection in June.