Xplore: a rural internet provider's CCAA and a $154.5 million DIP

Xplore Inc., which grew from a company incorporated in 1998 into what its chief restructuring officer calls "Canada's largest rural-focused internet service provider," obtained protection under the Companies' Creditors Arrangement Act on November 10, 2026, with twelve affiliated companies, per the CRO affidavit, Nov. 10, 2026, paras. 4, 9, 38. Justice Dunphy of the Ontario Superior Court of Justice (Commercial List) stayed proceedings until November 20, extended the same protections to ten limited partnerships in the group, appointed FTI Consulting Canada Inc. as monitor and approved a DIP agreement for up to $154.5 million. For now the group may borrow no more than $77,000,000 under it, and the order directs that everything owed under an August bridge loan be paid from the first advance, per the Initial Order, Nov. 10, 2026, paras. 3, 12, 23, 32–34 and the CRO affidavit, para. 173.

The group sells internet access over fixed wireless, satellite and fibre to "hundreds of thousands of subscribers across Canada," in the affidavit's words. Fixed wireless brought in approximately 66% of 2025 revenue, satellite 25% and fibre 9%. The CRO puts the group's investment in its network at approximately $4 billion. As of September 2026 it had approximately 1,100 employees, about 500 in Ontario and about 400 in New Brunswick, none of them unionized; the head office is in Markham, Ontario, and the main operating company was called Xplornet Communications Inc. from 2011 until 2022, per the CRO affidavit, paras. 9–10, 38–39, 55, 87–88. Revenue in the unaudited consolidated statements of the parent, Stonepeak Falcon Holdings Inc., was $317,816,000 in 2025, down from $344,324,000 in 2024, with a loss from operations of $36,852,000; in the first half of 2026 revenue was $144,134,000 and the operating loss $40,993,000, per the CRO affidavit, Exs. "D"–"E" (Application Record, pp. 198, 203). The company "will continue to provide normal course ongoing internet services to its customers as this process unfolds," the affidavit says, per the CRO affidavit, para. 29.

Two years after the CBCA

The affidavit is sworn by William E. Aziz, president of BlueTree Advisors Inc., whose engagement as chief restructuring officer the initial order authorizes the group to continue, per the CRO affidavit, para. 1 and the Initial Order, para. 4. A recapitalization under s. 192 of the Canada Business Corporations Act closed on October 28, 2024. Among its elements, approximately $1.46 billion of first-lien debt was exchanged for an initial second-out term loan of approximately $330 million, 96.373% of the new Class A common shares of Stonepeak Falcon Holdings Inc. and other consideration, per the CRO affidavit, paras. 134, 136. The CRO swears that it cut secured indebtedness by more than $1.2 billion and annual cash interest costs by approximately $120 million, and that approximately $550 million of new debt and equity, the bridge included, has come in since. It "was not, however, intended to provide a complete solution to the Company's long-term funding needs," per the CRO affidavit, paras. 13, 137.

A subsidy paid on completion

The CRO's account of the trouble begins in Ontario. Xplore Inc. was awarded a $354 million grant in May 2022 under the province's Accelerated High-Speed Internet Program, reduced to $276 million when all parties agreed in 2025 to cut the project's scope. The project, which the CRO calls "an approximately $540 million fibre-build project," is to build approximately 6,300 kilometres of fibre-based infrastructure for approximately 48,000 households, and up to 80% of the maximum subsidy is payable only after each network segment is complete. Much of the network is aerial, which needs pole-attachment approvals from utilities and make-ready work on their poles; delays in both, the affidavit says, have held back the completion of segments, the subsidy payments and the start of customer revenue, per the CRO affidavit, paras. 19, 76, 78–79.

The company has spent approximately $360 million on the project, approximately 65% of its total expected capital expenditures, and has received approximately 9% of the expected subsidies; approximately $251 million becomes available only once the project is complete. It had anticipated using the project's customer revenue to fund other projects, and it is in "ongoing discussions with the Ontario government with respect to achieving a balanced solution," per the CRO affidavit, paras. 20, 144.

The business plan, the affidavit says, counted on monetizing wireless spectrum to help fund the fibre build. The CRO understands that a federal moratorium introduced in March 2023 on certain transfers of spectrum licences in commercial mobile bands "has significantly affected the market for spectrum in Canada," and a monetization of certain spectrum assets in April 2026 realized less than forecast. Major carriers' discounted fixed wireless offerings have cut into the company's market share and revenues in certain regions, and competition from faster satellite internet companies has contributed to subscriber losses, the affidavit says; the subscriber base fell 13% year over year in the quarter ended June 30, 2026, and EBITDA, "while still positive, has declined during 2026," per the CRO affidavit, paras. 139–141, 147.

Owner, lenders and a September 15 milestone

Funds affiliated with Stonepeak are the indirect controlling shareholders of Stonepeak Falcon Holdings Inc., whose shares are also held by certain of the secured lenders and others; Stonepeak is a secured lender too, and one of the two backstop parties for the DIP, per the CRO affidavit, paras. 30, 35, 98. Xplore Inc. borrows under four secured loans. At October 31, 2026, in Canadian dollars with U.S.-dollar amounts converted at 1.3977, the affidavit's table shows $49,843,000 under the bridge term loan, from lenders in the Lender Committee, an ad hoc committee of the secured lenders; $107,801,000 under a first-out term loan, from a syndicate including Lender Committee lenders and Stonepeak; $92,862,000 under a delayed-draw term loan, from Stonepeak; and $341,527,000 under the second-out term loans, from a syndicate including Lender Committee lenders: $592,033,000 in all. Under an intercreditor agreement of August 4, 2026, the bridge lenders' liens rank ahead of the 2024 lenders' on the shared collateral, per the CRO affidavit, paras. 22, 98–99, 107, 113. Three fibre partnerships borrow separately from the Canada Infrastructure Bank, which at October 31 had approximately $67.2 million, $19.2 million and $27.2 million drawn under three secured facilities; Xplore Fibre L.P., which carries on the fibre business, has granted no pre-filing security, per the CRO affidavit, paras. 51, 117–119, 175.

On August 4, 2026 the company, Stonepeak Falcon Holdco LP and certain lenders under the 2024 credit agreement entered into a transaction support agreement to pursue a binding term sheet for a recapitalization, with September 15 as the milestone for agreeing on one. "However, despite concerted efforts, Stonepeak and the Lender Committee have not, to-date, been able to reach agreement on the terms of a consensual recapitalization transaction," the CRO swears. Certain of those lenders made the $50 million bridge available under a credit agreement of the same date, and on October 2 Stonepeak Falcon Holdco LP added $7.5 million as an incremental second-out loan, per the CRO affidavit, paras. 23–24. The CRO is advised that the company was unable to make a US$5,176,934 interest payment under the 2024 credit agreement due October 30, 2026, or a US$821,340.17 interest payment on the bridge due November 4. The requisite lenders agreed to extend the grace periods temporarily, but "there can be no guarantee that further extensions are forthcoming," per the CRO affidavit, paras. 26, 158.

On why no financing could be agreed outside court, the affidavit says: "Stonepeak and the Consenting Lenders each have certain rights under the Credit Agreements, Intercreditor Agreement, Transaction Support Agreement and the Company's shareholders agreement that make it challenging to achieve an actionable financing solution without the consent of all parties," per the CRO affidavit, para. 168.