CANADA. Prominent onboard retail technology provider GuestLogix has closed the court-supervised sale of OpenJaw Technologies to China’s state-owned Travelsky Technology.
OpenJaw is a provider of travel distribution software solutions. Travelsky is best known as a global distribution system for the Chinese travel industry.
The deal is valued at US$38.5 million after closing adjustments but before transactions fees and expenses, GuestLogix said. The transaction does not include any of the assets of the company’s onboard business.
In February, GuestLogix filed for creditor protection under the Companies’ Creditors Arrangement Act (CCAA) after it defaulted on payments.
The Ontario Superior Court of Justice then granted approval for GuestLogix to enter into a sale and investment solicitation process, which meant companies could bid to acquire the business or its assets, or offer a refinancing or recapitalisation.
PricewaterhouseCoopers was appointed as monitor for the proceedings.
GuestLogix had stated in February: “After careful consideration of all other available alternatives, the Board of Directors of the company determined that it was in the best interests of the company and all of its stakeholders to file for an application for creditor protection under the CCAA.
“The company has been otherwise unable to restructure its affairs in an adequate manner as a result of a combination of continuing negative operating results, the current state of the capital markets, and the inability of the company to identify a suitable transaction from its previously announced strategic review process that would satisfy all of the company’s existing financial obligations, both secured and unsecured.
“Further, on 8 February 2016, the company received a formal notice of default from its senior lender in respect of certain events of default under its senior credit facility and forbearance agreement.”
A stay of certain creditor claims was put in place by the court, and has since been extended to 5 August 2016. It allows GuestLogix to maintain normal business operations while the sale and investment solicitation process takes place.
Trading in the common shares of the company on the Toronto Stock Exchange was halted in February.
The company’s principal regulator, the Ontario Securities Commission, issued a cease trade order effective 5 April. This ceases all trading in securities of GuestLogix as a result of its failure to file its consolidated audited financial statements for the period ended 31 December 2015.
A securities class action was filed against Guestlogix alleging it published annual and interim financials and made other statements that had “material misrepresentations regarding various financial covenants attached to two different credit facilities” it had entered into between 2013 and 2015. Guestlogix was in default of both credit facilities, and the company also noted that it might be required to restate its prior financial statements.
An independent committee of the company’s directors, in consultation with its independent auditor, conducted an internal review which found that GuestLogix’s revenue recognition accounting policies and its historical financial statements were in compliance with IFRS, meaning that a restatement of its 2013 and 2014 financial statements was not necessary.
With respect to its unaudited condensed interim consolidated 2015 financial statements, GuestLogix said it was “satisfied that the company’s current revenue recognition accounting policies are in compliance with IFRS” and would also not need to be restated.
