AIMCo has a private holding company named Seibu Investments that is being used to mitigate losses in a now bankrupt junior oil and gas company and an oilfield services company owned by a connected conservative businessman.
Bankruptcy documents show that Seibu Investments purchased FutEra Power in July from Razor Energy. FutEra Power is an unlisted subsidiary of Razor Energy, a junior oil and gas company that AIMCo had been invested in and lending to since 2017 and which has been in bankruptcy protection since January of 2024. Six months before Razor Energy went insolvent due to not not being able to pay its natural gas processor AIMCo agreed to convert $63.9 million of secured debt Razor owed it into a 70 per cent equity stake in FutEra Power.
“I’d call it shadowy. While this stuff is technically public nobody really knows about it. You’ve got to plow through bankruptcy court proceedings to find out about this move by AIMCo to purchase these Razor assets,” said Greg Meeker, the former chair of the Alberta Teachers’ Retirement Fund and an expert on pension governance.
“They’re trying to mitigate any losses. That’s what this holding company is all about. That's what these debt to equity swaps are all about. It’s all about mitigating losses for companies that were marginal investments to begin with,” said Meeker.
The two directors of Seibu Investments are two AIMCo employees: David Tiley, the managing director and head of fundamental equities, public equities and Chris Tsang, a portfolio manager in fundamental equities.
“They knew that Razor was a sketchy play to begin with because the interest rate was so high. At the time a government of Canada bond was paying 2%, this was like five times more risky than that,” said Meeker who was referencing the 10 per cent interest that AIMCo was charging Razor on its original loans.
FutEra’s only asset is a 21 megawatt combined natural gas and geothermal electric power plant that cost $49 million to build and started operating in 2023. The project’s energy mix is roughly 70 per cent natural gas and 30 per cent geothermal. Nearly a quarter of the project's funding came from government sources.
Images from FutEra Power's Twitter account.
We’ve reported extensively on AIMCo’s continued and inexplicable loans and investments in Razor Energy over the years. In 2018 AIMCo had loaned Razor $45 million dollars and Razor’s executives were enriching shareholders by giving out dividends and doing share buybacks despite being a very marginal company. Corporate documents from 2020 showed that executives and corporate officers owned 29 per cent of the company. In 2020 Razor stopped its dividend and share buyback program and Razor also stopped making interest payments on its AIMCo loans.
In 2021 we reported that Razor Energy was operating “a new and responsible crypto mining operation in Swan Hills, Alberta.” At the time FutEra CEO Lisa Mueller told the Progress Report that the electricity generated by the geothermal project was only for sale to the grid and not for the crypto mining operation. No reports on the crypto mining operation ever appeared again in Razor’s corporate documents before it entered bankruptcy protection.
AIMCo did not respond to questions on whether it planned to continue operating the FutEra plant or how much it has lost on its investments in Razor Energy. The other announced sale as part of the bankruptcy proceedings had Razor Energy selling some of its assets to HNW Energy. HNW was recently in the news when a well it was drilling near Cochrane blew up and injured five workers, three critically.
Conservative oil magnate’s company fails make interest payments to AIMCo
The only other public transaction that Seibu Investments has taken part in was in 2022, when AIMCo converted $100 million of debt into 49.7 per cent ownership of Western Energy Services. AIMCo converted Western Energy Services’ debt into equity after Western Energy Services missed multiple deadlines on paying the interest on AIMCo’s loans.
The latest annual information form for Western Energy Services notes that AIMCo’s large holdings in Western Energy Services constitute a “significant financial risk.” The document notes that there is no assurance that the interests of AIMCo will align with the interests of the corporation, and further, the large holdings of AIMCo in the company may impact the liquidity of the company’s shares. “AIMCo’s very significant shareholding position may also make third parties who have an interest in acquiring a large share position or seeking a more significant transaction involving the Corporation’s shares reluctant to do so, adversely affecting the potential demand for shares and the Corporation’s share price,” says the document.
Western Energy Services latest audited financial reports show that the company still owes AIMCo $99 million, with that loan coming due in May 2026.
Western Energy Services’ co-founder and chairman is Ron Mathison, an oilfield services magnate and a regular funder of conservative causes in Alberta. Mathison has given more than a quarter of a million dollars to conservative political parties, third party advertisers or leadership races in the past decade either personally or through companies he controls.
In 2018 Jason Kenney described Mathison as a “great Alberta entrepreneur” and a “fantastic philanthropist.” In October 2023 Danielle Smith delivered remarks at the Southern Alberta Business Hall of Fame Gala where Mathison was inducted, later posing with Mathison afterward for a photo for the government’s official Flickr feed.
Danielle Smith with Ron Mathison. Photo taken on October 23, 2023 at the Southern Alberta Business Hall of Fame induction ceremony. Image via Flickr.
The many “disasters” of the Alberta Growth Mandate
Both Razor Energy and Western Energy Financial Services were companies invested in by AIMCo under the Alberta Growth Mandate, an initiative of the Notley administration that was discontinued by the UCP under Jason Kenney. The directive encouraged AIMCo to invest in Alberta companies. AIMCo interpreted this directive to mean investing in marginal oil and gas junior companies and oilfield services companies, many of which had billions of dollars worth of environmental cleanup liabilities on their books.
Trident Exploration went bankrupt shortly after AIMCo invested $60 million into it under the Alberta Growth Mandate This company infamously walked away from 4700 wells, dumping them on the Orphan Well Association.
“I think the board is under informed about the disasters from the Alberta Growth Mandate,” said Bob Ascah, a former vice-president at Alberta Treasury Board and a Parkland Institute research fellow.
“The rot seems to be deep at AIMCo,” said Ascah, who has written extensively about the Alberta Growth Mandate and compared it to the corruption scandal that rocked ATB in the ‘90s after a controversial refinancing of West Edmonton Mall.
Under the Alberta Growth mandate AIMCo invested in Pieridae Energy, a company whose entire value proposition hinged on building an LNG project on the Atlantic coast in Nova Scotia. They’ve walked away from that LNG project and AIMCo now owns 47 per cent of a natural gas production and midstream company that has lost half its value in the past year.
AIMCo also invested in Perpetual Energy under the Alberta Growth Mandate, a company which recently settled a complex lawsuit/bankruptcy case that will double the amount of orphan wells in Alberta. Under the mandate AIMCo also invested in Calfrac, an oilfield services company also founded and chaired by Ron Mathison. Calfrac still has operations in Russia, despite the ongoing invasion of Ukraine and multiple rounds of sanctions being levied against Russia.
AIMCo does not publicly disclose their investments and did not answer questions for this story. AIMCo manages the Alberta Heritage Trust Fund and most of these Alberta Growth Mandate investments were made with money from the Alberta Heritage Trust Fund. AIMCo officials will have a live question and answer session after an update on the fund’s performance on November 6. Members of the public can attend in person, watch live and ask questions as part of the Q&A.