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 2019-02-05 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!
commented 2019-02-05 19:59:06 -0500
Thanks Ezra and Sheila for exposing these socialists for the lying scum that they are . They are going to regret all the destruction they have brought to Alberta after they get obliterated in the next election !
commented 2019-02-05 19:42:37 -0500
Ole "leather face " draw your last breath you and your band of socialist’s are done!!! Ding dong the witch is gone!!!
commented 2019-02-05 18:56:27 -0500
Notley is clutching at straws, she can smell herself, the smell of dead meat rotting on the not so level playing field of politics. Your political life is over Notley and I am sure the people of Alberta will not be sorry.

Nully Desperandum Rachel.
commented 2019-02-05 18:30:42 -0500
Well, there goes $440 million of Alberta tax payer’s cash. Can’t wait until that bitch is out of office. I hope she is kicked out so far that the NDP is not even party status anymore.
commented 2019-02-05 18:02:40 -0500
Larson E. Notley named after the W.C. Fields carnival crook and con man.
We live in democracies in name only when the citizens have no way of preventing governments from profligate spending and outright fraud.
commented 2019-02-05 17:43:34 -0500
Lock her up! And take Trudeau too.
commented 2019-02-05 17:35:06 -0500
This is a set up to rip off Alberta tax payers again. This is criminal and fraudulent.
Another story of technology that is a hoax. What is needed is for the federal and provincial governments along with activist judges to stop killing Canadian jobs with regulations. They come up with new ones every other day.
commented 2019-02-05 17:19:22 -0500
This is a massive scam done by a pro con artist.Undoubtedly some of the $440 million will find it’s way back into NDP coffers.

If we had a true mainstream media,this story would be front page news and on every evening news broadcast. Harper’s BIG failure to help out Sun-TV has resulted in thsi, an msm that is nothing more than a propaganda machine for the Liberals and NDP.
commented 2019-02-05 17:02:24 -0500
Sounds to me like this $440 million was on a convoluted path to make its way back to the NDP party just in time for an election.