Flow Beverage Corp has announced plans to transfer ownership of its business to its lenders through a court-supervised foreclosure process, as the Canadian water company works to address liquidity challenges.

The deal, reached with NFS Leasing Canada and RI Flow LLC, will see the lenders or their designee assume substantially all of Flow’s assets in exchange for extinguishing its debt. The transition will be implemented under receivership proceedings before the Ontario Superior Court of Justice (Commercial List).

As part of the agreement, the lenders will provide bridge financing to allow Flow to continue operating during the restructuring. A newly formed company (NewCo) is expected to take over the business with a reduced debt load, offering jobs to some of Flow’s existing employees.

The announcement follows a strategic review led by a special committee of independent directors and advised by Origin Merchant Partners. After exploring alternatives, the committee determined the restructuring to be the most viable option.

Once the transaction closes, Flow and its subsidiaries will be wound down under the supervision of a court-appointed receiver and the Bankruptcy and Insolvency Act (Canada).

Top image: © Flow Mineral Spring Water USA