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Coco Paving office and lot is pictured in North York Ont. on Tuesday, January 11, 2021.J.P. MOCZULSKI/The Globe and Mail

The controlling shareholders of troubled Bridging Finance Inc., Jenny and Rock-Anthony Coco, are in talks to sell their family road-paving business, The Globe and Mail has learned.

Founded in Windsor, Ont., but now based in Toronto, Coco Paving Inc. has grown substantially over its 50-year history, particularly through its 2009 acquisition of multinational Lafarge SA’s road-paving assets in Ontario and Quebec. Ms. Coco is the company’s chief executive officer and oversaw the Lafarge deal, but she is now looking to sell, according to four people familiar with the talks.

The Globe is not identifying the sources because they are not authorized to speak publicly about the potential sale.

Coco Paving predominately operates in Ontario, but other assets include paving and civil construction operations in Manitoba and Saskatchewan, which were part of the company’s expansion efforts over the past decade. Coco Paving is a division of parent company Coco Group, which also builds homes in the Windsor area and owns a golf course.

In total, the paving company owns 34 asphalt plants, runs 17 regional offices and employs about 3,000 people. Because it is a private business, revenues and profits are not publicly available.

Interested buyers are expected to include private equity firms, according to a person familiar with the sale, because they tend to have more leeway than public companies when it comes to ESG (environmental, social and governance) considerations. Asphalt and concrete are energy-intensive businesses.

Lawyers representing the Coco Group, Ms. Coco and Mr. Coco, who goes by Rocky, did not return multiple requests for comment.

The Coco family’s succession plans have been unclear since family patriarch Guglielmo (Bill) Coco died in December, 2018. Ms. Coco does not have children. Her brother has two, one of whom works for the family business.

The current sale talks coincide with the continuing scandal at private lender Bridging, where hundreds of millions of dollars from 26,000 predominately retail investors have disappeared.

What is Bridging Finance and who are its leaders?

Bridging Finance’s receiver pegs investor losses at a minimum of $580-million

The Cocos control the lender with a 58-per-cent stake, and Ms. Coco was one of eight people who sat on Bridging’s credit committee, which approved loans.

It is unclear if there is any connection between the paving company’s potential sale and Bridging’s woes. The Ontario Securities Commission, which obtained court approval last April to place Bridging under the control of a receiver, has not made any direct allegations of misconduct on the part of the Cocos. This fact was highlighted by a lawyer for the Cocos in one of the first court proceedings concerning Bridging. The bulk of the allegations to date concern Bridging’s former CEO, David Sharpe.

However, the OSC’s investigation is continuing, and aside from any potential allegations, the proceeds from any sale will likely draw the attention of Bridging’s receiver. In November, The Globe reported that the lender’s investors are expected to lose between $800-million and $1-billion, and last month the receiver, PricewaterhouseCoopers LLP, said investors are expected to lose at least $580-million.

Total losses should be known soon, because PwC is currently running a sale process for Bridging and final bids will put a floor on any losses.

Determining who is ultimately responsible for these losses could take years in court. While the Cocos have not been targeted by the OSC to date, they have already agreed to repay investors in a related matter.

In 2019, Bridging’s owners sold a 50-per-cent stake in the company to financier Gary Ng for $50-million. At the time, Bridging had lent $100-million to Mr. Ng, and some of this money was used to buy his stake in the business. Not long after, an industry regulator alleged Mr. Ng had falsified his collateral for these loans.

To address the issue, the Cocos and Natasha Sharpe, Mr. Sharpe’s wife, bought back Mr. Ng’s $50-million stake in Bridging for $5 in March, 2020. (Ms. Sharpe was Bridging’s chief investment officer and the company’s minority shareholder, alongside the Cocos.) The co-owners later repaid $42-million in cash to Bridging’s investors and promised to repay investors another $20-million using their share of profits and incentive fees earned in 2020.

By the start of 2021, $38-million still had to be repaid to investors, but Bridging was put into receivership just a few months later.

Beyond this remaining balance, it is unclear if investors have any claim on the Coco family’s assets. Even if they do, the ownership structure of the Cocos’ assets still has not been determined.

For instance, around the time that Mr. Ng’s shares were repurchased for $5, Bridging faced funding troubles because Canada went into its first COVID-19 lockdown. As financial markets tanked, panicked investors filed redemption requests amounting to 10 per cent of Bridging’s assets under management. With the economy in free-fall, the lender couldn’t sell its illiquid loans fast enough, and it was forced to gate its funds and lock investors in.

Around this time, on April 3, 2020, Ms. Coco transferred her house in Toronto’s wealthy Forest Hill neighbourhood to her husband, Michael Visocchi, for $2. The house was jointly purchased in September, 2017, for $8.6-million with no mortgage. Ms. Coco did not respond to multiple requests for comment on this transfer.

Coco Paving was founded by Nina and Bill Coco in 1964 and originally specialized in concrete paving, but shifted to focus on asphalt in the 1980s. Rocky Coco has worked for the business dating back to summer jobs during high school and Jenny Coco joined the company in the late 1980s.

Coco Paving’s acquisition of the Lafarge assets in 2009 shifted the business east, away from Windsor, and the head office moved to Toronto. At that time, the Lafarge business had $500-million in annual sales and employed 1,200 people.

Bank of Montreal underwrote the acquisition, and Natasha Sharpe worked in corporate credit at the bank. Ms. Coco and Ms. Sharpe quickly developed a tight bond, and in 2011, Ms. Sharpe joined Coco Group’s board of directors.

The following year, Ms. Sharpe started Bridging with financial backing from Jenny and Rocky Coco.

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