Nemaska ​​Lithium has accepted a sale proposal structured as a credit bid from a group made of the corporation’s largest secured creditor, Orion Mine Finance, Investissement Québec and The Pallinghurst Group.

The sale, announced on Monday, comes at the conclusion of a sale or investor solicitation process under the Companies’ Creditors Arrangement Act (CCAA).

The buyers’ group will acquire Nemaska business and assets, other than certain excluded assets and liabilities that will be transferred directly or indirectly to a new entity – Residual Nemaska Lithium.

Residual Nemaska Lithium will become a successor reporting issuer.

The consideration offered under the bid comprises the assumption of liabilities by New Nemaska Lithium totalling at least $146.5-million, including the Orion and the Johnson Matthey Battery Materials secured claims, and the transfer to Residual Nemaska Lithium of the corporation’s cash on hand on closing, subject to certain adjustments.

Pursuant to the bid, substantially all of the current employees of the Nemaska will be retained by New Nemaska Lithium in their current roles and responsibilities in all material respects, and all obligations of the Nemaska under the Chinuchi agreement with the Cree Nation of Nemaska, the Grand Council of the Crees (Eeyou Istchee) and the Cree nation government will be assumed by New Nemaska Lithium.

New Nemaska Lithium will not be a reporting issuer under applicable Canadian securities laws.

The bid is conditional upon the satisfaction of customary closing conditions, including obtaining approval under the Competition Act (Canada) and Court approval. The transaction is expected to close on October 15.

Following closing of the transaction, Nemaska Lithium expects Residual Nemaska Lithium to present a plan of compromise or arrangement to its creditors in respect of the residual cash and any of its residual assets to be received by Residual Nemaska Lithium.

Based on the terms of the bid and the consideration to be received by Residual Nemaska Lithium, holders of the corporation’s common shares will not receive any payments for, or distributions on, their common shares in connection with the CCAA proceedings, nor will they hold any interest in New Nemaska Lithium following the completion of the plan of compromise or arrangement.

In December, Nemaska Lithium obtained from the Superior Court of Québec protection from creditors under the CCAA, to enable the corporation to finalise its financing efforts in order to complete the construction of the Whabouchi project, in Quebec.