CONNACHER ENTERS INTO A FORBEARANCE AGREEMENT Connacher Oil and Gas Ltd (2) (C:CLC)
Shares Issued 28,328,656
Last Close 3/31/2016 $0.22
Thursday March 31 2016 - News Release
Mr. Merle Johnson reports
CONNACHER ENTERS INTO A FORBEARANCE AGREEMENT
Connacher Oil and Gas Ltd. has entered into a forbearance agreement with Credit Suisse AG, Cayman Islands branch, as administrative agent and certain lenders constituting the required lenders under the credit agreement in respect of $153.8-million (U.S.) of loans made by the lenders under the credit agreement, dated as of May 23, 2014 (as amended, restated, supplemented or otherwise modified from time to time (including as amended pursuant to the amendment No. 1 dated May 8, 2015)). Under the terms of the Forbearance Agreement, among other things, the Lenders agreed to forbear from exercising their enforcement rights and remedies arising on account of the failure of Connacher to pay the cash interest and principal payments due on March 31, 2016 until the earlier to occur of April 30, 2016, the occurrence of an event of default under the Credit Agreement, unrelated to the failure to pay principal and interest due on March 31, 2016, or the occurrence of a default or breach of representation by the Company under the Forbearance Agreement.
The failure to pay the principal payment due on March 31, 2016 and the failure to pay cash interest within the applicable grace period pursuant to the Credit Agreement each constitutes an event of default under the 12% convertible second lien note indenture dated May 8, 2015 (the "Convertible Note Indenture"). The Company is working with an ad hoc committee of the holders of the 12% convertible second lien notes ("Noteholders") and will continue to work with the ad hoc committee during the forbearance period.
The Company continues to pursue its previously disclosed process to investigate, evaluate and consider possible financing and restructuring alternatives available to the Company, which is being carried out by a special committee of its Board of Directors. The Company does not intend to comment further regarding the review process unless a specific transaction or other alternative is approved by the Board of Directors, the review process is concluded or it is otherwise determined that further disclosure is appropriate or required by law.
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