Canadian renewables company BioAmber has received Quebec court approval for debtor-in-possession (DIP) financing. The funding will enable the company to continue its search for new investors, renegotiate its debts and maintain operations at its plant in Sarnia.

BioAmber filed a voluntary petition for relief under chapter 11 of the US bankruptcy code on 4 May, while its two Canadian subsidiaries filed a Notice of Intention to make a proposal under Canada’s Bankruptcy and Insolvency Act.

Under the Quebec ruling, non-binding letters of intent (LOI) under the Sales and Investor Solicitation Process (SISP), which began on Jun. 1, are now due by Jun. 29, with binding terms sheets due by Jul. 31.  The court has also extended the stay of proceedings against the two Canadian subsidiaries to Jul. 31, consistent with the SISP.

Canadian lender Maynbridge Capital is providing BioAmber with DIP funding totaling Can$3 million, to be disbursed in two tranches. Up to Can$2 million can be paid through Jul. 31 with an additional Can$1 million provided after that date, assuming the receipt of an LOI.

BioAmber’s CEO, Rick Eno, said the approval of DIP financing is a positive milestone in the company’s continued restructuring. He commented: “With this favorable court decision, we are pleased to be able to continue operations in Sarnia to meet the growing demand we’re seeing from the market. In the longer term, BioAmber has a number of strategic and financial investors evaluating an investment as part of the SISP. We are optimistic that the closing of a transaction will provide our customers long-term supply assurance from the Sarnia facility.”

Should the company fail to achieve its financing and restructuring goals, it will likely have to file for bankruptcy.