Canada’s Avison Young, a commercial real estate firm, is in the final stages of a restructuring process to improve its position after defaulting on a senior term loan, which led to a ratings downgrade, Bloomberg reported on Sunday.
The Toronto-based company missed principal and interest payments in the third and fourth quarters of 2023, resulting in a downgrade to “SD” for selective default by S&P Global Ratings.
Avison’s CEO, Mark Rose, stated that the company planned to eliminate more than 50 per cent of its obligations and remove non-independent directors from its board.
The company is expected to announce the restructuring soon, and S&P was obligated to inform the market immediately after being updated on the plans. Avison’s default is considered “purely technical” and is part of an agreed-upon revamp with lenders.
The company’s investors and creditors have agreed on a plan that involves new funding from existing backers.
Avison’s partners will continue to own a majority of the firm, with Caisse de Depot et Placement du Quebec remaining as an investor. The company anticipates a positive re-rating after the agencies review the new structure, which is expected to be finalised and made public within the next two weeks.
