Bankruptcy: Tuscany Int’l Drilling seeks sale to lenders February 3, 2014 at 3:21pm
Bankruptcy: Tuscany Int’l Drilling files Chapter 11, seeks sale to lenders
Tuscany International Drilling, a Canadian onshore drilling company with operations in Colombia, Brazil, and Ecuador, filed for Chapter 11 protection in Wilmington, Del., on Sunday, listing nearly $200 million in debt under its prepetition loans.
The company has signed a restructuring support agreement with holders of 95% of its prepetition loans, under which Tuscany said lenders will be able to credit bid their claims in a bankruptcy auction of the company’s assets. Milestones set under the RSA require Tuscany to file its proposed reorganization plan and disclosure statement within 30 days of the Chapter 11 filing, and to hold a confirmation hearing within 90 days.
Lenders will provide the company with a $70 million debtor-in-possession credit facility, consisting of $35 million in new money and a roll-up of $35 million in prepetition debt. Credit Suisse is serving as administrative agent for the DIP, priced at L+800 with a 2% LIBOR floor. Tuscany will ask Judge Kevin Gross for access to up to $15 million in new money on an interim basis at a Feb. 4 hearing.
In its initial court filings, Calgary-based Tuscany traced its financial woes to late 2012, when it began to experience significant revenue, cash flow, and liquidity challenges, due in large part to low rig utilization, non-payment by certain customers on large overdue accounts receivable and underperforming acquisitions in Brazil and Africa. At the moment, its overall rig utilization is less than 60%, Tuscany said.
The company’s board has been pursuing strategic alternatives since 2012, when it hired Black Spruce Merchant Capital Corp. Tuscany also hired Citigroup Global Markets Inc. as a financial advisor in 2013. Latham & Watkins and Young Conaway Stargatt & Taylor are representing the company in its U.S. restructuring. McCarthy Tetrault is counsel to the firm in Canada, where it plans to seek relief under the Companies’ Creditors Arrangement Act. – John Bringardner
https://www.leveragedloan.com/bankruptcy-tuscany-intl-drilling-files-chapter-11-seeks-sale-to-lenders/