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TORONTO — As RB Energy Inc. flamed out and fell into creditor protection during the past couple of weeks, investors were shell-shocked.
Despite some start-up problems in recent months, Vancouver-based RB seemed to be in an ideal position. It was emerging as North America’s only serious lithium producer, just as demand for the metal is set to soar because of its use in electric vehicle batteries. Its management team was linked to the legendary Lundin Group, a resource conglomerate with a fantastic track record of success. Lundin companies do not just melt down like that.
But RB did. It filed for protection last Monday after its stock price collapsed and it could not raise capital under reasonable terms.
“I can tell you it’s been a long time since I’ve seen the resource capital market crash as quickly as that,” chief executive Rick Clark said. “I would say the last time was back in the ‘90s.”
There was a time when RB, formerly known as Canada Lithium Corp., had a much easier time raising cash. The company has tapped the capital markets for about $268-million since 2009, according to Financial Post data. RB also received $92-million of debt financing from Bank of Nova Scotia and Caterpillar Financial Services that was partially guaranteed by the Quebec government.