Tuscany International Drilling Inc T.TID

Bankruptcy: Tuscany Int’l Drilling seeks sale to lenders

[khaledb]

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/

[khaledb]

TID looks to sell the bulk of its assets to lenders owed approximately $200 million. Folks.... Do you think lenders are interested to buy tid assets?.... Do you think a deal is on the table?.....

[onthecase]

Considering the smooth choreography with which the involved parties have been acting - from the "Early Warning" PR, to the simultaneous granting of an unusually short Forbearance Agreement and notice of Chapter 11 intentions, to the restructuring support agreement signed today, I'd say that a deal is very much on the table, and probably has been for at least 6-9 weeks. The details

[rapid_fire_]

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[onthecase]

To rapid_fire_: That is the question, isn't it? Will there be money? I'm leaning toward yes, for the reasons I've stated in my previous posts and the fact that cancelling & reissuing existing stock is harder to do when assets outweigh debts. That's a tool usually used when debts outweigh assets, as a means of generating new funds, because the stock is already valued at 0 or

[khaledb]

Credit suisse did the same with ATP oil & gaz last year. She was the buyer.   Walter didn't stop talking about the blackout....that he is unable  to answer our requests and maybe it is because they have already a deal on the table with CS. but i hope  the deal will save all shareholders rights... And i hope too to get something as .10 or .20 per shares to recover a little my

[pennywyse2]

Seems like we are hearing that CS is going to take the assets in forgiveness of debt, and then put those assets in a private company which will be eventually sold. There was some guy on this board who has been predicting that for a couple of weeks now. I forget his name. Risky something, maybe you can remember?

[khaledb]

Forgiveness of debt.... Ok but why do you think walter will accept to give it to CS with 0 dollars in his hand??   

[RHertig]

What? I seem to be hearing they need to do a workout and the majority of creditors are freindly to it. CS seizing all their assets is neither a workout or friendly. I cannot see a US judge seizing our equity above what is owed and giving it away.

[RHertig]

You may be right. Here is credit bidding explained. https://www.turnaround.org/Publications/Articles.aspx?objectID=7795