February 06, 2019

EXCLUSIVE INVESTIGATION: Notley promised $440M to oilsands company that defaulted on $507M loan, has no plans for construction

Ezra LevantRebel Commander

A few days ago, Alberta Premier Rachel Notley announced that she was giving a $440 million loan guarantee to a Calgary company called Value Creation that was building a massive new oilsands upgrader near Edmonton.

She was joined by Dr. Columba Yeung, the president and majority owner of the company.

The accompanying press release read in part:

Calgary-based Value Creation Inc. (VCI), and its wholly-owned subsidiary Value Chain Solutions Inc., is on track to invest $2 billion in an upgrading facility in the Alberta Industrial Heartland, just east of Edmonton, which will create more than 2,000 construction jobs and another 200 full-time positions once the facility is up and running.

Notley went even further, saying:

Construction of the Strathcona County-based project is already underway.

Except it’s a lie.

Our Alberta bureau chief, Sheila Gunn Reid, went to the project site, which just happens to be down the road from her home. There is no activity there at all. There is no construction already underway. There is no construction at all. It’s mainly empty fields. It looks like there was some construction ten years ago, but then it was abandoned. They haven’t put a shovel in the ground in a decade.

So I did something that I don’t think any of those Media Party journalists who wrote gushing stories about Notley’s announcement did:

I just picked up the phone and called the company.

WATCH to see what I learned from Iva Georgieva, who is in charge of public relations for Value Creation.

It lined up with other research I did, like the news story I dug up that was written 10 years ago:

Oilsands operator BA Energy files for bankruptcy protection

BA Energy became the first oilsands casualty of the world-wide economic slowdown, after the company filed for bankruptcy protection. The company and its parent company, Value Creation Inc. (VCI), is struggling to stay afloat after halting construction on a massive upgrader project. BA is suffering from a cash flow shortage and as such will be unable to repay a loan of approximately $50-million plus interest to VCI due Dec. 31, 2008...

So they are a real company. But they became insolvent ten years ago. The article confirms they halted construction. Ten years ago. Nothing’s underway. Rachel Notley lied.

This company that Notley is about to give a $440 million loan guarantee to, had to repay a $50 million loan back on December 31, 2008. But they ran to court two days before it was due, and told a judge they just couldn’t pay it.

Let me read from Dr. Yeung’s affidavit back in 2008:

BA Energy is suffering from a cash flow shortage and as such will be unable to repay a loan (as defined below) of approximately $50 million plus interest to VCI due December 31, 2008. The failure to repay the loan may place VCI in default of its main credit facility thus permitting the credit facility lenders (as defined below) to accelerate repayment and immediately demand the full balance owing on the VCI PIK Loan, which will, as of January 9, 2009, amount o approximately US$507 million.

It goes on like that for a long time. He was asking the court to protect his company from creditors who want to be repaid $507 million.

It was tough economic times. And his partial bitumen upgrader idea wasn’t selling. He told the judge his technology was really, really good, and when oil prices were better maybe someone would invest in them —  the same technology that Notley is talking about.

When he said that, the price of oil was $35 a barrel. By mid-2011, the price of oil had tripled.

But still, nobody wanted to invest in Dr. Yeung’s technology. Serious companies came to investigate it — but none of them thought it worked.

I found an oilsands CEO from a multi-billion dollar company who seriously investigated it back then. That CEO is retired now, and asked to remain anonymous. But here’s what he told me when I asked about Dr. Yeung:

"[H]e has spent the last 15 years trying to convince all serious refining players that his technology of partial upgrading is the answer to all problems. It would have been if it only worked. Total, Shell, BP etc. all looked at his technology but none believe it will work. Suppose it is easier to convince the NDP.”

And that’s the thing. Dr. Columba Yeung convinced a bank called Credit Suisse to lend him $50 million, and then he defaulted, and sought creditor protection.

His website shows no operational activity in a decade, because there hasn’t been any.

Until Rachel Notley came around, with a promise of $440 million of your money and mine.

I decided to contact Dr. Columba Yeung directly. 

And he confirmed via email what Iva Georgieva told me on the phone:

They’re not an operating company. 

They don’t in fact have construction underway.

And he said it wouldn’t make sense to raise money yet.

Rachel Notley lied about this upgrader. It’s an empty, snow-covered field. There’s no construction underway. There’s no money that’s lined up.

But the entire press gallery in Alberta is complicit in this lie, too. We here at The Rebel are the only people who even bothered to check the facts.


HELP: Rachel Notley is coming to kill The Rebel!

Did you know that Notley’s hand-picked election commissioner is prosecuting The Rebel for our journalism? Because we criticize Notley, they claim we are breaking the law. To learn more about that case, and to help pay for our legal defence, please visit StandWithTheRebel.com

If Notley gets her way, we’ll be put out of business — then she won’t have to worry about embarrassing questions from independent reporters.


 

Comments
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commented 2019-02-10 16:31:00 -0500
Reminds me of the cold fusion flap back in the 80’s… it never took off because it didn’t work… it was a scam… guess this is Rachel’s version of cold fusion…
commented 2019-02-07 22:54:05 -0500
Rebel poster’s can bury the video if they want to.. you can flag me if you feel so upset about it.
commented 2019-02-06 23:52:37 -0500
commented 2019-02-06 23:52:19 -0500
Warning.. this is not the usual..
commented 2019-02-06 23:47:04 -0500
Take the bait…
commented 2019-02-06 23:34:40 -0500
I’m sure Ezra is ready.
commented 2019-02-06 23:33:17 -0500
Notley and Trudeau… If you think you can shut down The Rebel.. You better think twice..

There are other media’s out there that would take in the Rebel Staff that you could not touch.. and you would be extremely exposed to what you really are.
commented 2019-02-06 23:12:30 -0500
commented 2019-02-06 23:12:10 -0500
Just a question.. What was the official report on the Fort McMurray fire?
commented 2019-02-06 21:18:25 -0500
Geezus… said it before.. The Yanks got a swamp full of swamp creatures and the Canucks got a cesspool full of cesspoolians..

The blatant nerve and audacity of corruption that Notley’s crew has done in the past and present only means they think they are a lock and nothing will break them..

I guess Trudeau has their back… eh!
commented 2019-02-06 20:30:14 -0500
Ron Voss
We are reading the same document. The loan guarantee is not a done deal. Yeung has a lot more work to do. There is no point lending him 20% of the project budget. The whole caper is an election gimmick allowing the NDP to pretend there at a ground-breaking ceremony nothing is actually happening. At the same time it’s inaccurate to say there actually has been a loan guarantee. Yeung, obviously, will have to line up some real world investors …not likely.
commented 2019-02-06 20:04:50 -0500
It would be great to have play by play coverage by THEREBEL on election night in Alberta. I doubt that Rachel would allow a reporter at her gathering but my advise to her is don’t order any fireworks for a victory celebration.
commented 2019-02-06 18:44:33 -0500
WILLIAM KAY, “I note from the press release that all Yeung has really received from the province is a “letter of intent” to provide a loan guarantee “subject to reaching a final agreement.” He won’t get the guarantee unless he ponies up the other $1.6 billion.” I presume yuh are correct but the press release did not say it was subject to Yeung coming up with $1.6 billion despite the press release saying he is “on track to invest $2 billion in an upgrading facility”.
commented 2019-02-06 17:58:05 -0500
This is why rachel wants you shut down. You’re reporting the truth and actually looking into her BS while Trudeau’s lapdogs turn the other way.
commented 2019-02-06 16:59:44 -0500
Notley like Trudeau lies time and time again and it further demonstrates that these two colluded to quash Alberta’s oil and gas sector from the get go.The NDP rats have been nothing but smoke and mirrors,Notley should be tried and locked up for their slimey,corrupt policies!!
commented 2019-02-06 12:35:56 -0500
Media cheerleaders, like trained seals, backed up Notley’s pre-election bladder about diversifying the economy:

Global News: Calgary-based company to build $2-B bitumen upgrader facility near Edmonton

Globe & Mail: Notley to announce $2-billion facility aimed at squeezing more oil into clogged pipelines

CBC: Notley spurs upgrader project with promise of $440M loan guarantee
It’s part of a larger government strategy that could see $3B doled out to diversify Alberta’s energy sector.

CTV: Calgary-based company invests $2B in new upgrading project near Edmonton

Calgary Herald: Alberta government to partially backstop new $2 billion dollar bitumen upgrader

Calgary Herald: Can’t pipe, will upgrade: New $2B oilsands upgrading facility secures $440M loan from Alberta

Calgary Herald: Varcoe: With a $440M loan guarantee, NDP up ante on its energy plan
commented 2019-02-06 11:06:43 -0500
Notley and the Fake News Media Party Paid Whores, caught red-handed in $440 million lie!

Liar, liar, pants on fire,
LOCK HER UP, behind the wire,
Orange jumpsuit and shackles, swell,
Send that lyin’ demon straight back to hell!
commented 2019-02-06 08:39:05 -0500
Peter Netterville , What is Cultural Marxism ?
commented 2019-02-06 07:53:50 -0500
Don’t be fooled, people, there will be enough slow-on-the-uptake people in Alberta to give Notley the Destroyer a seat or two, especially the riding in which the U of A resides.

If I am not mistaken, I think that riding has been NDP for a lot of years, which just goes to prove that the U of A pumps out a lot of the not-the-sharpest-knife-in-the-drawer Cultural Maxists.
commented 2019-02-06 04:31:14 -0500
Excellent reporting Ezra! Thank you for putting in the time and effort to expose Notley for what she truly is, a liar. For some strange reason she believes that this announcement of a non-project (just a give-away of Albertan’s tax dollars to a fake project) will save her skin in the election but we have her number and she’ll be dialed out of political existence shortly.
commented 2019-02-06 01:39:31 -0500
I can’t wait to hear the crap they spew when they lose the election. All the names they will call voters.
commented 2019-02-06 01:38:41 -0500
Liza Rosie that is why Notley was having the Rebel silenced, so glad Ezra is fighting that BS!
commented 2019-02-06 01:31:53 -0500
Notley really isn’t very good at her spin is she? It didn’t occur to her that Ezra would be all over this?
commented 2019-02-06 00:12:23 -0500
Good reporting by Ez.
I note from the press release that all Yeung has really received from the province is a “letter of intent” to provide a loan guarantee “subject to reaching a final agreement.” He won’t get the guarantee unless he ponies up the other $1.6 billion. Yeung’s playing both ends against the middle – using the promise of a loan guarantee to impress investors. The good news is that probably nothing will happen; not even the loan guarantee. It’s pre-election blather.

The press release is worth reading in full. They are shovelling money off the back of a truck, right now. I see “it will reduce greenhouse gas emissions” and my eyes roll back in my head.
commented 2019-02-05 23:46:08 -0500
I think the investors got a little spooked when they found out the new technology was named Abracadabra.
But that wouldn’t stop the socialist NDP who believe in magic !!!
commented 2019-02-05 21:41:03 -0500
This douche bag so called Premier should have her ass thrown outta Alberta-how’s Venezuela sound leather face pack yer bags and yer scotch you old drunk and get outta Dodge!!!
commented 2019-02-05 21:33:13 -0500
It just falls in line with socialist economics: if it failed the first time, then it will succeed the second so might as well invest in it. When it does not succeed the second time then the third or fourth or as many times as it takes until the people no longer have anything left to tax.
commented 2019-02-05 19:59:31 -0500
I worked on this project from 2007 thru 2009. It has been mothballed since 2009. They could not prove their technology and therefore could not get investors. To my understanding his wife is the owner of VCI and they invested about $450 million into the project including engineering, underground development, equipment purchase (all stored in the big tent on site) plus some vessels and tanks were installed. What a farce 10 years later Notley gives them money to offset their losses. Is it coming out if her personal account because the voters in Alberta should not be on the hook for anything!