BURNABY, British Columbia (BRAIN) — Knolly Bikes is considering all restructuring options after its bank demanded loan repayment. Founder and CEO Noel Buckley said in a statement released Thursday that because of Royal Bank of Canada's actions, "We are now in a position where we must evaluate all restructuring options to determine the best path forward. That process is underway. I expect to have more clarity within the coming weeks and will share it as soon as I have it."
Knolly Bikes has been cutting costs and improving efficiency and "we were making progress," Buckley said. However, he added, Knolly Bikes is not folding.
"I started Knolly in a garage because I believed I could build a better bike. I still believe that. The question in front of me right now isn't whether Knolly should exist — it's what Knolly needs to look like to keep existing. We have been in active development and on the cusp of releasing several new models before these recent events occurred."
Concerning customers, Buckley said the company already fulfilled the majority of open orders and is resolving the few that remain. He said protecting dealer relationships is a priority.
"I'm not going to make promises I can't keep today, but protecting those relationships is central to every conversation we're having," Buckley said.
Buckley expressed frustration with RBC.
"This comes at a time when RBC is posting record annual profits, $20.4 billion last fiscal year. RBC has been consolidating aggressively, and small businesses like ours are feeling the consequences. In an already concentrated Canadian banking landscape, the options for companies in our position are narrowing, not widening.
"I'm not here to litigate our bank's priorities. But when a business is doing the hard work of recovery and its lender chooses to write down the account rather than work through it — while posting the most profitable year in Canadian banking history — the community that supports us deserves to know that."
