Poseidon Concepts Corp.’s unique oil-field services product was soon copied by others.JASON FRANSON/The Globe and Mail
Editor's note: An earlier version of this post incorrectly stated that Poseidon's shares will be de-listed Thursday. This version is correct.
Poseidon Concepts Corp., once one of the S&P/TSX Composite Index's hottest stars, will no longer be listed in Canada.
After a review, the TSX ruled that Poseidon's shares should no longer be listed because the company does not meet the exchange's listing requirements. The move comes roughly two months after the stock was cease traded by the Alberta Securities Commission. The stock will be delisted on May 17.
Until late 2012, Poseidon was highly respected for devising new tanks that hold water used when drilling for oil and gas. Suddenly it seemed like everyone wanted their business and the stock soared.
But then everything fell apart. In mid-November the shares plummeted 62 per cent, and in late December the company suspended its dividend, formed a special committee to address writing off some accounts receivable and shuffled both its management and board of directors.
Everyone started asking questions, and it was all downhill from there.
By mid-February the shares were worth just 27 cents each, but the biggest blow came when management admitted that it should not have recorded $95-million to $106-million in revenue in the first nine months of 2012, a period when the company reported revenue of $148-million.
Not only has Poseidon now been delisted, but last week the company sought creditor protection. After management admitted that its revenue needed to be restated, it also became apparent that Poseidon would default under its loan agreement.
The special committee, with the help of some accountants, is now going through the books and has asked the board to see if "restructuring the company's affairs is feasible." Any reworking could prove to be tricky. As the Globe's Nathan VanderKlippe reported in Febrary, of Poseidon's 440 tanks, only 96 were being rented in mid-February.
Should there be some value after the review, Poseidon has hired Ernst & Young Orenda Corporate Finance Inc. to help solicit and evaluate offers for the business. All bids are due by May 15.
However, it will be hard for anyone to bid because the special committee is already raising more questions.
"Based upon the investigation by the special committee, questions have arisen with respect to the recorded revenues in the 2011 annual financials. At this time, it is uncertain whether or not a restatement of the 2011 annual financials is required," the company said in a statement.
(Tim Kiladze is a Globe and Mail Reporter.)
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Tim Kiladze