Province steps in, provides $35M in financial support to struggling Laurentian

Laurentian University has announced it is receiving financial support from the Ontario Ministry Colleges and Universities.

The university announced last winter it is insolvent, and has been undergoing restructuring under the Companies’ Creditors Arrangement Act (CCAA).

The financial terms of the support from the province include $35 million to refinance the existing DIP (debtor-in-possession) financing made available within the CCAA proceeding, said a press release issued by Laurentian Thursday. 

The province also expressed an intention to replace the DIP Facility with a long-term loan upon Laurentian’s emergence from the CCAA process with a successful Plan of Arrangement, on terms to be agreed.

Other terms include up to $6 million in COVID-19 funding for the university, and enrolment corridor and performance protection of up to a combined amount of $22 million over a number of years.

The university said in the press release that the package of support from the province “will see the university emerge from its restructuring as a stronger, financially viable and vibrant institution serving students, employers and communities in Northern Ontario.”

“Laurentian is very pleased with this demonstration of the Province’s continued support for Laurentian and commitment to its long-term success,” said the press release.

“The university is grateful to the province for its assistance and collaboration throughout this restructuring.

The financial package will ensure that the effects of the restructuring do not unduly impact Laurentian’s operations and provides the university with a period to stabilize all of its operations following emergence from CCAA, said the press release.

“Laurentian has appreciated MCU’s support prior to and throughout its CCAA restructuring, and looks forward to continuing that positive relationship with MCU as DIP Lender,” the press release said.

In the same press release, Laurentian said a total of 11 members of its board of governors resigned Wednesday.

“Laurentian is committed to an accelerated process of Board renewal,” said the press release.

“In connection with the financial support package provided by the Province and with two of the five Lieutenant-Governor-In-Council (LGIC) nominee spots vacant, the three existing LGIC nominees on Laurentian’s Board of Governors resigned yesterday, together with eight other Board members, for a total of eleven outgoing Board members. 

“These resignations are effective immediately.”

The province is appointing five individuals to fill its LGIC nominee spots on the Board of Governors in accordance with the Laurentian University of Sudbury Act. The term "Lieutenant Governor in Council" refers to the “Lieutenant Governor acting on and with the advice of the Executive Council or Cabinet.”

“Once onboarded, Laurentian looks forward to working with these new members of the Board,” the press release said.

“Laurentian wishes to acknowledge the commitment demonstrated by its outgoing Board members during this difficult time in its history, and thanks them for their volunteer service in the face of tremendous adversity.”

The press release added that with this announcement, “new applicants who may be considering Laurentian can feel even more confident in their choice to study in the North, with a fully restructured university. 

“This package of support from the Province will benefit the entire Laurentian community, as well as the broader region in the North that it serves.”

Laurentian added that the university “remains steadfastly committed to emerging from the CCAA restructuring process, so that it continues to be a university of choice for students in the North, and there is still much work to be done. 

“As part of Laurentian’s ongoing efforts, the university committed to a full operational and governance review, which is nearing completion. In addition, Laurentian will be completing a full strategic review with the benefit of an independent third party, as it emerges on a solid financial footing.

 “Laurentian is confident the Province’s package of support will contribute significantly to the university’s emergence in 2022 as a fully restructured and financially sustainable university.”