More senior leadership has also been replaced and the company has appointed a chief restructuring officer to help weather the storm. Meanwhile, teachers at a Loyalist-owned school in Vancouver have ended their strike, saying negotiation channels have reopened.

Last week, Loyalist Group announced that it had secured part of the CAN$2.8m funding that is required based on the conditions of its forbearance agreement with senior lender Bank of Montreal.

“Both parties have agreed to private mediation and we are waiting for bargaining dates to be confirmed”

“We are pleased to have completed the first stage closing of our non-brokered private placement for $2.1 million and look forward to closing $0.7 million of firm orders during the second stage this week,” said CEO Shawn Klerer, in a statement.

After almost two weeks, teachers at Vancouver branch of Loyalist-owned school, PGIC, have called off their strike, which began on June 24 when talks with Loyalist Group over pay reached a stalemate.

Dianne Simmons, an instructor at the school, said the strike was unrelated to the company’s fiscal troubles.  Speaking with The PIE News she said they “took down the picket line Friday morning”, and returned to the classrooms on Monday.

“Both parties have agreed to private mediation and we are waiting for bargaining dates to be confirmed,” she added.

Loyalist Group have also announced the resignation of two board members – Martin Bernholtz and Rehan Huda, and the new appointment of Salim Maherali, managing director of digital marketing at Adobe Canada.

And a newly created position has seen former president of the student housing division, Shant Poladian, step in as Chief Restructuring Officer, who will oversee the restructuring and recapitalisation of the company.

In the statement, the group said the new CRO role “is intended to ensure a proper flow of communication between internal and external parties” and to limit distractions “which would otherwise impede the abilities of the CEO and the CFO to dedicate their time and energy to the essential day to day activities of the company”.

Keler said the appointments are “part of our various initiatives to put Loyalist back on sound footing and rebuild confidence with all parties.”

The financial troubles with Loyalist began as a result of the release of their awaited financial statements, which reported a CAN$19.5m loss last year. Following this, their stock on the TSX Venture fell to a 52-week low of seven cents.