Waterloo Innovation Network: a 3.06% loan and a third of the buyer

In September and October 2025, the receiver of 176 Columbia Street West in Waterloo asked Enova Power Corp. whether it would hold the 13 MW of capacity it had allocated to HIVE Digital Technologies on a design application for the building. The answer came with a condition. "Although Enova advised that it does not reserve capacity for sites for sale for future owners, it confirmed that it would work with the Receiver to hold the 13 MW capacity," The Fuller Landau Group Inc. reports, provided the receiver hired a consultant to prepare site drawings and submitted a design application for Enova's approval, per the Fifth Report of the Receiver, Oct. 7, 2026, para. 35. On February 27, 2026, after reviewing drawings by the receiver's engineering consultant, Stantec Consulting Ltd., and their revisions, Enova gave the receiver a new design application specifying that, to maintain the 13 MW allocation, a construction agreement for the distribution expansion work would have to be signed within 12 months. The receiver submitted it that day in the name of Waterloo Innovation Network 2 Inc., the company that owns the building, and Enova accepted it, per the Fifth Report, paras. 15, 39.

That application is the first of two reasons the receiver now gives for a reverse vesting structure. In a motion record dated October 7, it asks the court to approve a subscription agreement of September 16 under which Hyperion Compute Corp. would subscribe for new shares of WIN2 that, once every existing equity interest is cancelled, would be all of its shares. WIN2 would keep the building, free of claims and encumbrances other than permitted ones, together with the power application, the design application and its $100,000 deposit (plus HST); the assets and liabilities the deal excludes would vest in a new company, Residual Co, to be added as a debtor in the receivership, per the Fifth Report, paras. 23–24, 58(b) and the Subscription Agreement, Sept. 16, 2026, recitals, s. 2.2 (App. O to the Fifth Report). The structure, the receiver writes, "will enhance recovery by preserving the value associated with the Receiver's Subsequent Design Application and the land transfer tax saving to the Purchaser associated with a reverse vesting structure, as opposed to a traditional receiver's vesting conveyance of the Property," per the Fifth Report, para. 74.

The motion is returnable October 30. At a case conference on October 2, Justice Cavanagh set it down for half a day in person and recorded that "Mr. Starkman's clients intend to oppose the approval motion." Paul Starkman appeared for Mark Arbour and Waterloo Innovation Network PM Inc., listed on the counsel slip as non-parties, per the Endorsement of Justice Cavanagh, Oct. 2, 2026, counsel slip and paras. 2–3 (App. M to the Fifth Report). On September 8, as reported here on September 9, the receiver had told Justice W.D. Black that it was "optimistic that it will have a firm and binding agreement in hand in the near term," per the Endorsement of Justice W.D. Black, Sept. 8, 2026, para. 3.

Four bids, and two that were close

The sales agent, Ernst & Young Transaction Real Estate, was formally engaged on January 31, 2026, and built a contact list aimed at, among others, institutional investors, developers, educational institutions, data centre operators and neighbouring owners. The receiver reports that 352 parties were contacted, 31 signed non-disclosure agreements and 12 toured the property. On the agent's recommendation the receiver moved the bid deadline from May 14 to June 1, 2026, and by then had four bids, three of them letters of intent and one an expression of interest. Three bidders were invited into a second round due June 15, and three bids came in, per the Fifth Report, paras. 16, 32, 40, 42–46 and the Notice of Motion, Oct. 7, 2026, para. 19.

The valuation ranges in the brokers' proposals, gathered before the agent was chosen, suggested that the best price would come from a sale as an AI data centre, which would require significant additional power in the short term. Stantec's work and meetings with Enova then confirmed, the receiver reports, that the existing 8 MW "is insufficient for an AI data centre," that the estimated cost of upgrading for a further 5 MW "would be substantial," and that extra capacity for a buyer would be uncertain: "Available capacity is subject to change and is determined by Enova on a first-come, first-served basis, according to system conditions and active applications at the time of submission." Because of the existing capacity and the cost of the upgrade, "the Bids received did not approach the upper ranges of the valuations in the Broker Proposals," per the Fifth Report, paras. 49–50, 52.

The estimated realizations from the two higher bids, the report says, were not substantially different. Hyperion's, the highest, "was subject to a quick closing, whereas the second highest Bid was subject to closing up to 180 days following Court approval." The second-highest bid also proposed a reverse vesting transaction, but if the court did not grant one it would default to a traditional receiver's vesting conveyance at a reduced purchase price, and it was all cash. "However, regardless of which of the two higher Bids was selected, the Lender stood to suffer a significant shortfall." After consulting the sales agent and the lender, the receiver, "with the Lender's support," chose Hyperion's bid and signed with it on September 16, per the Fifth Report, paras. 53–56.

The summary of bids and the brokers' comparative summary are among five confidential appendices the receiver asks to keep sealed until closing or further order, along with the marketing materials, the unredacted subscription agreement and a draft loan agreement. Sealing, it says, "will avoid negatively impacting a further sale process if the ARVO Transaction is not approved by the Court or does not close," per the Fifth Report, paras. 41, 48, 51, 59–60, 75–76.

What the price is made of

Under the agreement the price is satisfied in three ways. Hyperion's $500,000 deposit, paid to the receiver's lawyers in trust on signing, is released to the receiver. Funds are wired, at the receiver's direction, to cover any shortfall between the receiver's cash on hand at closing and the "Priority Payment Amount", defined as all amounts that by operation of law rank ahead of the lender's security, including amounts owing under the receiver's charge and its borrowings charge. And WIN2 keeps the "Retained Ninepoint Debt", a sum "representing a portion (but not all) of the Ninepoint Debt." The amount of that debt, and the figure in the purchase price clause, are redacted in the filed copy, per the Subscription Agreement, s. 1.1 ("Priority Payment Amount", "Retained Ninepoint Debt"), ss. 3.1–3.3 (App. O) and the Fifth Report, paras. 58(c)–(f), 59. The cash goes to the receiver, which would pay the priority amounts out of it once the court approves those payments by order, per the Subscription Agreement, s. 8.3 (App. O).

A side letter of September 15 among the lender, the receiver and Hyperion puts that shortfall payment on the lender. Ninepoint Canadian Senior Debt Master Fund LP covenants to pay in cash the difference between the receiver's cash on hand at closing and the Priority Payment Amount, which, the letter records, the receiver estimates at $3,560,892. The obligation is to be met "entirely at its own cost and for its own account"; the payment is not to be added to its debt and gives it no right of recovery against Hyperion, or against WIN2 after closing, and the receiver has no recourse against Hyperion for it. Ninepoint's performance is a condition of closing; if the letter and the subscription agreement conflict on the subject, the letter prevails, per the Side Letter Agreement, Sept. 15, 2026, recital E, ss. 2, 4–6, 8, 13 (App. P).