British Columbia Resources Investment Corporation

British Columbia Resources Investment Corporation, generally abbreviated BCRIC and popularly pronounced “Brick,” was a government-created British Columbia holding company associated with Premier William R. Bennett’s effort to place strategically important resource assets under provincial control and broaden public participation in investment. The corporation assumed ownership of sawmills, mines, and other resource installations that the provincial government had acquired or supported during financial rescues. Rather than operating primarily as a consumer-facing brand, BCRIC functioned as an umbrella investment vehicle for forestry, mining, petroleum, and related industrial interests. BCRIC became especially notable because of its unusual share-distribution scheme. On August 7, 1979, five free bearer shares were issued to every British Columbian. The program was designed to encourage residents to become investors in the province’s resource economy and, in principle, to allow the corporation to recover value through the subsequent sale of additional shares. The certificates were transferable bearer instruments, meaning ownership was associated with possession of the documents rather than a conventional registered shareholder account. The distribution made BCRIC highly visible across the province and gave it an unusually broad retail-investor base for a government-sponsored industrial holding company. The corporation expanded by acquiring or controlling numerous mining and logging operations. Its investment strategy became exposed to the volatility of capital-intensive natural-resource industries, however. Westar Petroleum, a subsidiary, made a substantial investment in a North Sea oil project, while Westar Mining encountered unfavorable timing and market conditions in a mining investment. These commitments contributed to serious financial pressure. The deterioration in the company’s prospects caused the value of BCRIC-related investments to collapse, with investors who had paid substantial amounts for additional shares seeing their holdings decline to only pennies in value. BCRIC’s corporate identity was eventually changed to Westar Group Ltd., shifting the organization away from its original provincially branded investment identity. In 1995, the shares were consolidated at a ratio of 125 old shares for one new share. The restructuring meant that the original package of five bearer shares represented only 0.8 percent of one post-consolidation share. In June 1997, as part of a privatization transaction involving the Jim Pattison Group, the consolidated shares became subject to a compulsory buyout priced at C$70 per consolidated share, equivalent to C$0.56 for each original bearer share. The buyout process included a ten-year claim limit. That period expired on June 30, 2007, after which outstanding BCRIC share certificates no longer carried monetary value. BCRIC is therefore remembered less as a successful long-term investment brand than as a distinctive episode in British Columbia’s political economy. It combined state intervention in troubled resource industries, mass public share distribution, and an eventual corporate and financial restructuring. Its history illustrates the risks of using a broadly distributed public investment vehicle to hold concentrated positions in cyclical mining, forestry, and petroleum assets.

BCRIC emerged from the British Columbia government’s intervention in troubled resource businesses. Under Premier William R. Bennett, the province had acquired or supported various sawmills, mines, and other industrial assets. British Columbia Resources Investment Corporation was established as a holding structure for these interests, giving the government a single corporate vehicle through which to manage and expand its resource portfolio. The organization’s most distinctive feature was its mass share distribution. On August 7, 1979, every British Columbian was provided with five free bearer shares. The initiative sought to make residents direct participants in the province’s economic development while also creating a base of potential investors who might purchase additional shares. The certificates became a highly recognizable symbol of the provincial government’s attempt to connect public ownership with resource-sector growth. BCRIC subsequently broadened its activities across mining, logging, forestry, and petroleum-related assets. This strategy exposed the company to the financial risks of cyclical commodity markets and large project investments. Westar Petroleum, one of the company’s subsidiaries, invested heavily in a North Sea oil play. Another subsidiary, Westar Mining, suffered from poor timing in a mining investment. Together, these developments contributed to financial trouble and a dramatic erosion of investor confidence. People who had bought additional shares for thousands of dollars could see those holdings fall to only pennies in value. The company’s name was eventually changed to Westar Group Ltd., reflecting a transition away from the original BCRIC identity. The financial structure was later reorganized. In 1995, the shares were consolidated on a 125-to-1 basis. At that point, the original five bearer shares represented 0.8 percent of a single post-consolidation share. The restructuring reduced the practical significance of the widely distributed certificates while allowing the company to deal with its outstanding equity in a more conventional form. In June 1997, a privatization transaction involving the Jim Pattison Group made the consolidated shares subject to compulsory purchase at C$70 each. Because one consolidated share represented 125 original shares, the stated value corresponded to C$0.56 for each original bearer share. The redemption arrangement had a ten-year limit, ending on June 30, 2007. Certificates that remained unredeemed after that date no longer had value. BCRIC’s legacy lies in the combination of provincial industrial policy and mass-market share ownership. It was created to give the government a corporate means of holding rescued resource assets and to invite ordinary residents into the investment process. Its later difficulties demonstrated the vulnerability of a concentrated resource portfolio to unsuccessful oil and mining investments. The eventual change to Westar Group, share consolidation, compulsory purchase, and expiry of the redemption period marked the end of the BCRIC structure and of the practical value of its famous bearer certificates.

• 2007

  Buyout claim period expires

  [1]British Columbia Resources Investment Corporationen.wikipedia.org

  The ten-year deadline for claiming the compulsory purchase proceeds ends on June 30, making unredeemed certificates valueless.

• 1997

  Compulsory buyout accompanies privatization

  [1]British Columbia Resources Investment Corporationen.wikipedia.org

  In June, the consolidated shares become subject to a compulsory buyout at C$70 per share in a privatization transaction involving the Jim Pattison Group.

• 1995

  Shares consolidated at 125 to 1

  [1]British Columbia Resources Investment Corporationen.wikipedia.org

  BCRIC shares are consolidated so that 125 pre-consolidation shares become one post-consolidation share.

• 1979

  BCRIC is formed

  [1]British Columbia Resources Investment Corporationen.wikipedia.org

  The British Columbia government establishes BCRIC as a holding company for resource businesses and installations acquired or supported through provincial intervention.

• 1979

  Five bearer shares distributed to British Columbians

  [1]British Columbia Resources Investment Corporationen.wikipedia.org

  On August 7, five free bearer shares are distributed to every British Columbian to promote public investment in the province’s resource economy.

A provincially sponsored resource-investment holding company intended to consolidate rescued industrial assets and encourage British Columbians to participate directly in the province’s resource economy.

• 1979Public bearer-share distribution

  British Columbia

  BCRIC distributed five free bearer shares to every British Columbian. The initiative served as both a public-investment program and a promotional effort intended to encourage residents to buy additional shares.

  Outcome. The certificates became widely recognized, but the company’s later resource-sector losses severely reduced the value of the investment.

  Source

• 1997

  Privatization and compulsory purchaseM&A

  Background

  Following the change of corporate identity to Westar Group Ltd. and the share consolidation, the company proceeded through a privatization transaction involving the Jim Pattison Group.

  Action taken

  The consolidated shares were made subject to compulsory buyout at C$70 per share, equivalent to C$0.56 per original bearer share.

  Aftermath

  A ten-year redemption period was established. After June 30, 2007, outstanding certificates no longer had monetary value.

  Compulsory buyout price. C$70 per consolidated share; C$0.56 per original bearer share (June 1997)

  Source

• 1995

  Consolidate the share capitalOther

  Background

  The original bearer-share structure had become impractical after the company’s financial difficulties and the substantial decline in share value.

  Action taken

  Shares were consolidated at a ratio of 125 old shares for one new share.

  Aftermath

  The five original bearer shares represented 0.8 percent of a post-consolidation share and were later addressed through a compulsory buyout.

  Source

• 1979

  Create a public resource holding companyStrategy

  Background

  The provincial government had acquired or supported a range of sawmills, mines, and other resource assets and needed a corporate structure to hold them.

  Action taken

  BCRIC was established as a holding company and expanded through resource-sector acquisitions and investments.

  Aftermath

  The strategy produced a broad but concentrated portfolio whose performance was later damaged by difficult mining conditions and a major North Sea oil investment.

  Source

1. 1British Columbia Resources Investment Corporationen.wikipedia.org