Royal Helium Ltd. Files for Creditor Protection: A Strategic Move to Maximize Asset Value

Royal Helium Ltd. (TSXV: RHC) (OTCQB: RHCCF), a Canada-based helium exploration and production company, has filed for creditor protection under the Bankruptcy and Insolvency Act (BIA) in an effort to maximize asset value for stakeholders. The company, which controls over 1,000,000 acres of prospective helium land across southern Saskatchewan and southeastern Alberta, has been facing financial distress due to a combination of operational challenges, lack of sufficient capital, and market conditions.



The BIA filing includes a stay of proceedings and the appointment of Doane Grant Thornton LLP as proposal trustee. The company will work with the trustee to streamline operations, conduct a Court-supervised sales process, and maximize asset value for stakeholders. The board of directors will remain in place, with management continuing day-to-day operations under trustee oversight.

Royal Helium's financial distress is primarily attributed to its inability to secure sufficient capital to meet working capital needs, creditor obligations, and fund engineering requirements to re-commission the Steveville Helium Facility. The company has been actively pursuing an out-of-court restructuring solution, including initiatives to raise additional capital, but has been unable to secure the necessary funds to address its financial obligations.

The company's VP of Geology and acting COO, Shayne Neigum, has resigned to pursue other opportunities, which may have further disrupted the company's operations and decision-making processes. Additionally, Royal Helium faces a potential delisting review by the TSX Venture Exchange, which could limit its access to capital and negatively impact its share price.



To maximize asset value for stakeholders, Royal Helium has several strategic options at its disposal. The company can work with the trustee to streamline operations, optimize production processes, and reduce costs. Additionally, Royal Helium can explore the potential sale of its assets, such as its helium permits and leases, to maximize value for stakeholders. The company may also consider restructuring its debt to manage its financial obligations more effectively.

In conclusion, Royal Helium Ltd. has filed for creditor protection under the BIA to maximize asset value for stakeholders. The company faces financial distress due to operational challenges, lack of sufficient capital, and market conditions. By pursuing strategic options such as streamlining operations, optimizing production processes, and exploring asset sales or debt restructuring, Royal Helium can work towards improving its financial health and maximizing asset value for stakeholders.